Walang personalan! RSA says San Miguel will still join energy auctions

SMC's Ramon Ang

Bilyonaryo Ramon Ang, president of San Miguel Corp., vowed to continue joining power supply biddings despite the Energy Regulatory Commission denying its petition for price adjustment of its 2019 power supply agreement with Manila Electric Co. (Meralco).

ERC thumbed down the joint motions for price adjustment filed by the Manila Meralco and SMC units South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC).

SMC offered a 10-year fixed price contract to Meralco under the 2019 PSA, but it sought to recover P5 billion from consumers due to losses incurred from extremely high coal prices and natural gas supply constraints.

“Of course, we will still join government biddings but based on conditions and TOR [terms of reference] of the DOE [Department of Energy],” Ang said.

Last week, SMC assured it would be able to fulfill its financial obligations despite its inability to raise its rates.

“Based on the company’s internal evaluation, SMCGP and its subsidiaries will remain compliant with its financial covenants under all existing loan agreements and other debt instruments,” the group said.

SMC said any termination of the PSAs would take effect 60 days from the receipt of the ERC orders.

Within this 60-day period, SMEC and SPPC must continue supplying Meralco at a cost higher than the contracted price under the PSAs.

“SPPC and SMEC will continue to explore other legal remedies relating to the ERC orders. Once the PSAs are terminated, SPPC and SMEC will have to sell their power to WESM and enter into bilateral contracts with other off-takers, the pricing of which will be market-based and thus will provide better financials and economics for SMCGP on consolidated basis,” SMC said.

https://bilyonaryo.com/2022/10/09/walang-personalan-rsa-says-san-miguel-will-still-join-energy-auctions/business/