THE ENERGY Regulatory Commission (ERC) said it will review the $3-billion energy landmark deal between Manila Electric Co. (Meralco), Aboitiz Power Corp. (AboitizPower), and San Miguel Corp. (SMC) following the recent approval by the Philippine Competition Commission (PCC).
This is to ensure that the companies are in compliance with the market share limitations, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said during a briefing on Monday.
“Technically, we’ll need to revisit our decision because we need to ensure that whoever the PCC has determined to be in control of two sets of assets — the two power plants and the terminal… [is compliant] with our market share limitations,” Ms. Dimalanta said.
Last month, the PCC approved the joint acquisition of two gas-fired power plants and an LNG terminal by Meralco PowerGen Corp. (MGen), Therma Natgas Power, Inc. (Therma), and San Miguel Global Power Holdings Corp. (SMGP).
MGen is the power generation arm of Meralco, while Therma is a wholly owned subsidiary of AboitizPower, through Therma Power, Inc. SMGP is the power arm of conglomerate SMC.
Under the deal, MGen and AboitizPower will jointly invest in two of SMGP’s gas-fired power plants: the 1,278-megawatt (MW) Ilijan power plant and the new 1,320-MW combined cycle power facility.
The three companies will also invest in the LNG import and regasification terminal, owned by Linseed Field Corp., in Batangas.
Following approval, the PCC has also set conditions as it identified “potential competition concerns” during its review of the mega-deal, “including risks of coordination in the national power generation market and foreclosure in power supply deals with distribution utility companies.”
Under Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, no company or related group can own, operate, or control more than 30% of the installed generation capacity of a grid and 25% on a national scale.
“We have a limit under EPIRA, so we will ensure that it won’t be exceeded because there are possible scenarios where it could exceed, so we need to address that,” Ms. Dimalanta said.
The ERC has yet to receive a copy of the PCC’s decision, she said.
“We’re looking forward to receiving a copy of the decision of the PCC so that we can complete our evaluation of the PSAs (power supply agreements),” Ms. Dimalanta said.
The commission will review Meralco’s power supply deal with SMGP’s Excellent Energy Resources, Inc. and South Premiere Power Corp., as well as future biddings of the power distributor.
It will also assess the issue of the ownership of the LNG terminal.
“That’s a key infrastructure of this type of asset. Whoever controls the terminal has control over the fuel of that asset,” Ms. Dimalanta said.
Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
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