A subsidiary of SMC Global Power Holdings (SMCGP), the power arm of San Miguel Corporation (SMC), has asked the Energy Regulatory Commission (ERC) to amend public offering requirements for power generation companies (gencos) and distribution utilities (DUs).
Based on a BusinessMirror report, SMC Consolidated Power Corporation (SCPC) filed a petition with the ERC to amend its 2011 and 2019 resolutions, seeking to allow the listing of the ultimate parent company of gencos and DUs, up to the reasonable sixth level of corporate relations as “compliant to the public offering requirement.”
Under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA), gencos and DUs that are not publicly listed are mandated to offer and sell at least 15% of their common shares of stocks to the public. If, for instance, their holding companies are listed on the Philippine Stock Exchange (PSE), they are considered compliant.
However, under a resolution released by the ERC, shares of stocks are only limited to two corporate layers to be declared as compliant with the public offering requirement. SMC is listed in the PSE, while SMCGP isn’t.
SCPC, which owns the 600-megawatt Limay coal power plant in Bataan, is looking to renew its certificate of compliance. The company is implying that there is basis to consider SMC as its holding firm considering that it holds SCPC as part of its umbrella structure along with other subsidiaries.
The company said that the 2011 and 2019 ERC resolutions are in need of amendments to incorporate the “application of the Grandfather rule.” as well as the Supreme Court’s definition of holding companies in ascertaining compliance with the public offering requirement.
Following the amendment request, SCPC has also asked the ERC to suspend the said resolution so that gencos and DUs won’t be penalized or affected until the matter is resolved.
The ERC is set to have a public consultation on the matter in February.