SAN MIGUEL Global Power Holdings Corp. (SMGP) said the show-cause order issued by the Energy Regulatory Commission (ERC) over the Ilijan gas power plant’s alleged anti-competitive practices is “outdated and without basis.”
In a statement on Wednesday, SMGP said that South Premiere Power Corp. (SPPC), the owner and operator of the 1,200-megawatt (MW) Ilijan gas-fired power plant in Batangas, has already been cleared by the Philippine Electricity Market Corp. (PEMC), the governance arm of the spot market, of any violation over the plant’s June 2022 outage.
Citing the PEMC market surveillance committee review in March and another one by its board in May, SMGP said that SPPC did not breach the “must-offer rule” of the Wholesale Electricity Spot Market (WESM).
“Their review found that the plant’s shutdown from June 5 to 25, 2022, was the result of fuel supply constraints that were beyond the company’s control,” SMGP said.
In an order dated July 24, the ERC said it evaluated the assessment report submitted by the PEMC, which found that the Ilijan power plant was placed on “open breaker status” for 21 days in June 2022.
This means the facility was not supplying the WESM, the trading floor for spot electricity contracts.
The ERC directed SPPC to explain why it should not be penalized for engaging in allegedly anti-competitive behavior when the shutdown coincided with high spot market prices and supply alerts.
SMGP said that the outage was due to “sudden and uncontemplated constraints in its supply of natural gas fuel after the cessation of its gas supply delivered via pipeline, which was the plant’s primary fuel for the past two decades.”
The company added that the disruption occurred despite “diligent efforts” exerted by SPPC with the previous operator of the power plant and pertinent agencies to address such constraints.
SMGP said that SPPC has facilitated the construction and commissioned a liquefied natural gas terminal capable of receiving, storing, and processing natural gas capable of producing up to 2,500 MW of baseload power.
SPPC was then wholly owned by SMGP, the power generation arm of conglomerate San Miguel Corp. It has since given up a 67% to units of the Meralco and Aboitiz groups. — Sheldeen Joy Talavera