Phinma Energy hauls PSALM to court
MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) and its former president and chief executive Emmanuel Ledesma are facing civil cases at the Makati Regional Trial Court (RTC) for unduly scrapping Phinma Energy Corp.’s contract to administer strips of energy of the Unified Leyte geothermal power plants (ULGPP).
Phinma Energy is also asking the Makati RTC to stop PSALM from terminating its independent power producer administrator (IPPA) contract for ULGPP’s strips of energy on grounds of administrator’s default.
Strips of energy refer to the capacity of a plant that range from one megawatt (MW) up to a maximum of 40 MW. Phinma Energy’s contract covers 40 MW of ULGPP.
“The grant of the prayer for a temporary restraining order (TRO) will restrain PSALM from terminating the agreement on the ground of administrator’s default and prevent PSALM from asserting any further claim to the detriment of the corporation,” the company said.
Phima Energy said the case has no material adverse effect on its operations.
“In the event that the court rules in favor of Phinma Energy, the agreement may be invalidated and an award for damages may be made to the corporation. An adverse decision may open the company to possible financial claims by PSALM,” it said.
Phinma Energy – formerly called Trans-Asia Oil and Energy Development Corp. – was among the seven firms that won IPPA contracts to administer strips of energy of the ULGPP by trading it at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.
But during the same month the winners were announced, Super Typhoon Yolanda severely hit Region 8, causing extensive damage to the ULGPP.
Facing several difficulties since the plant was damaged, Phinma Energy has been re-negotiating the terms of the agreement, which was only awarded a year after the incident. It has also been proposing several measures for relief.
However, the company received a notice from PSALM of the administrator default. The agreement was terminated and the performance bond was forfeited.
In a separate disclosure, Phinma Energy said it has entered into a solar energy service contract with the Department of Energy to develop a solar project with a capacity of up to 45-MW.