San Miguel Global Power (SMGP) is disputing a recent show cause order from the Energy Regulatory Commission (ERC), saying the 1,200-megawatt Ilijan Gas Power Plant had already been cleared by the Philippine Electricity Market Corp. (PEMC) of any violations over its June 2022 outage.

In March this year, PEMC’s Market Surveillance Committee, and later its Board in May, concluded that Ilijan’s operator, South Premiere Power Corp. (SPPC), did not breach the Wholesale Electricity Spot Market’s Must Offer Rule. The review found that the shutdown from June 5 to 25, 2022, was due to fuel supply constraints outside the company’s control.

Despite these findings, the ERC on July 24 issued an order—based on a 2022 MSC resolution during the tenure of former Chair Monalisa Dimalanta—directing SPPC to explain why it should not be penalized for alleged anti-competitive behavior. According to San Miguel, the period in question coincided with high spot market prices and supply alerts, and the plant was on “open breaker status.”

SMGP, which owned SPPC in 2022 but now holds a 33% stake after the entry of Meralco PowerGen and Aboitiz Power, attributed the outage to “sudden and uncontemplated constraints in its supply of natural gas fuel” after pipeline deliveries ceased. It said the disruption occurred “despite diligent efforts exerted by SPPC with the previous operator of the natural gas upstream facility and pertinent agencies to address said constraints.”

To bolster fuel security, the company said SPPC has since built and commissioned a liquefied natural gas terminal capable of supporting up to 2,500 MW of baseload, cleaner power—around 15% of Luzon’s net dependable capacity.

How should overlapping findings from PEMC and ERC be reconciled to ensure clarity and fairness in the power sector?

Follow Power Philippines on Facebook and LinkedIn or join our Viber community to stay up to date on the latest energy news.

Photo credit: SMC Global Power