By Danessa Rivera (The
Philippine Star) | Updated September 12, 2017 - 12:00am
MANILA, Philippines — Phinma Energy
Corp. is taking state-run Power Sector Assets and Liabilities Management Corp.
(PSALM) to court for suddenly terminating its independent power producer
administrator (IPPA) contract for the Unified Leyte geothermal power plants
(ULGPP).
In a disclosure to the Philippine
Stock Exchange, Phinma said it received authorization from its board of
directors to file a case against PSALM to stop it from terminating its IPPA for
ULGPP’s strips of energy on grounds of the administrator’s default. Strips of
energy is the capacity of a plant that range from one MW up to a maximum of 40
MW.
In November 2013, the company —
formerly called Trans-Asia Oil and Energy Development Corp. — was announced as
among the seven winners of the IPPA contracts to administer strips of energy of
the ULGPP.
Totaling 200 megawatts, the IPPAs
included Phinma Energy for 40 MW, Aboitiz Energy Solutions Inc. for 40 MW,
Vivant Energy Corp. for 17 MW, FDC Utilities Inc. for 40 MW, Unified Leyte
Geothermal Energy Inc. (ULGEI) for 40 MW, Good Friends Hydro Resources Corp.
for 20 MW and Waterfront Mactan Casino Hotel Inc. for 3 MW.
As IPPAs, winners will manage the
contracted output of the power facility which could be traded at the Wholesale
Electricity Spot Market (WESM), the country’s trading floor for electricity.
But during the same period, Typhoon
Yolanda severely hit Region 8 which resulted in extensive damage to ULGPP.
Phinma Energy said PSALM awarded the
IPPA contract for the strips of energy a year after the typhoon.
Since the power facility was
severely damaged, the power company has been re-negotiating the terms of the
agreement with the state-run firm.
“In several letters to PSALM,
Phinma Energy formally sought the renegotiation of the agreement and proposed
several measures for relief. Representatives of PSALM and Phinma Energy met on
several occasions. Phinma Energy wrote PSALM expressing the difficulties
suffered by the administrators under the agreement,” it said.
“Phinma Energy, through counsel,
wrote a letter exercising its right to withdraw from the agreement. Discussions
on the termination were initiated. However, Phinma Energy received a notice
from PSALM of the administrator default and PSALM has resolved to terminate the
agreement and forfeit the performance bond,” it added.
ULGEI, a subsidiary of Lopez-led
Energy Development Corp. (EDC), has turned down the award of the winning bids
after Yolanda “devastated the physical and economic conditions of the Unified
Leyte geothermal power plants.”
ULGPP is composed of the 125-MW
Upper Mahiao, 232.5-MW Malitbog and 180-MW Mahanagdong power plants, and the
51-MW optimization stations. It is covered by power purchase agreements between
National Power Corp. (Napocor) and EDC.
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