Respect TRO on Ilijan contract, SMC Global Power tells PSALM

MANILA, Philippines - SMC Global Power Inc. of the San Miguel Group said the Power Sector Assets and Liabilities Management Corp. (PSALM) should respect the 17-day temporary restraining order (TRO) issued by a local court against its illegal termination of the independent power producer contract for the 1,200-megawatt (MW) Ilijan power plant in Batangas.

SMC Global Power, through its wholly-owned unit South Premiere Power Corp. (SPPC), and state-run PSALM are currently embroiled in a dispute arising from the interpretations of certain provisions related to generation payments under the Ilijan IPPA agreement.

PSALM had terminated the IPPA agreement with SPPC, forcing the latter to seek legal action through the Mandaluyong Regional Trial Court (RTC), which issued a 72-hour TRO last week. The TRO was extended by 17 days, or until Sept. 28.

The court order stopped PSALM from terminating the IPPA agreement and prohibited the state-run firm from treating SPPC as being in default and from performing any act to pursue collection of supposed unpaid generation payments and other payments.

However, PSALM said only the Supreme Court has jurisdiction to grant a TRO or any other injunctive relief to SPPC because of the Sec. 78 provision of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).

For its part, SPPC stressed it was not asking the court to “restrain the implementation of the provisions of the EPIRA” but to restrain the breach of the IPPA agreement of the Ilijan power plant.

“The action of SPPC in restraining the termination of the IPPA Agreement is not restraining or enjoining the provisions of EPIRA. Rather, it is an action to compel PSALM to implement the provisions of the EPIRA by honoring the privatization of a Napocor asset, as required by EPIRA,” the company said.