SMC files plunder complaint against PSALM head

MANILA, Philippines (UPDATED) – Conglomerate San Miguel Corporation (SMC) has filed a plunder complaint against the head of government-owned Power Sector Assets and Liabilities Management Corporation (PSALM) and officials of energy firm, Team Energy Corporation (TPEC).

The complaint, filed with the justice department, has to do with the implementation of a contract for the Team Energy-owned Sual power station in Pangasinan, which SMC said resulted in losses of P14 billion ($300.4 million) to the government.

San Miguel Energy Corporation (SMEC), a subsidiary of San Miguel, launched the complaint against PSALM Officer-in Charge, Lourdes Alzona; Suguru Tsuzaki, President of TPEC; Kochi Tamura, Executive Vice President of Team Sual Corporation (TSC) and several John and Jane Does of violation of Section 3 (E) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act before the Department of Justice (DOJ).

Controversial agreement

In its 20-page complaint, San Miguel Energy Corporation (SMEC) said that elements of plunder are present in the case due to the alleged connivance of Alzona with TPEC and TSC by continuing the implementation of a questionable Memorandum of Agreement (MOA).

The controversial MOA was entered into in June 2009 by PSALM with TPEC and TSC, which served as the independent power producer (IPP) for the Sual Power Station.

The said MOA titled “ Memorandum of Agreement in Respect of the Excess Capacity of the Sual Power Station”  agreed that the Energy Conversion Agreement (ECA) Contracted Capacity would be 100 megawatts (MW) net per unit.

The MOA gives TSC the right by or through TPEC, to market, offer, sell and supply the Nominal Excess Capacity to any customer, independent of and without payment of any fee to PSALM or the National Power Corporation (NPC).

In June 2009, San Miguel Energy Corporation (SMEC) won the bidding as the SUAL IPP Administrator and was granted the rights to the 1,000 MW output of the Sual Power Station as net contracted capacity.

SMEC alleged that they were not able to get the net contracted capacity of 500 MW per unit because TPEC’s 100 MW nominal capacity was given priority based on the 2009 MOA.

“The TPEC Trading amount is settled first and kept intact most of the time while the PSALM Trading Amount (for SMEC) is only the balance after the TPEC Trading Amount is deducted from the Total Trading Amount,” the complaint alleged.

SMEC requested PSALM to review the MOA but the latter eventually sided with TPEC and endorsed a pro rata sharing proposal, saying that both SMEC and TPEC should share generation imbalances.

Illegally benefitted

SMEC alleged that TPEC illegally benefited from the excess capacity to the detriment of the Philippine government and SMEC.

From November 2009 to September 2013, TPEC was able to gain P17. 3 billion ($371.2 million) from the 2.82 Million MW generated as the “excess capacity” using the MOA settlement formula, it stressed.

SMEC said that  from that amount, P14 billion, should have gone to the government in accordance with ECA which states that the “Entire Power Station output” should be dedicated to NPC.

Meanwhile, SMEC said it should have been given the remaining P3.3 billion ($70.81 million), as it is the amount which corresponds to the capacity that was taken from SMEC’s 1000 MW net contracted capacity.

Sought for comment, Alzona said via text message Monday, October 26 that they have no information yet nor copy of the complaint filed against PSALM.

“We will give comment at the appropriate time,” Alzona said. – Rappler.com

$1 = P46.60