ERC to energy trio: Hold your horses
While the landmark acquisition of two gas-fired power plants and a liquefied natural gas terminal by a triumvirate of business giants has secured the approval of the Philippine Competition Commission (PCC), the Energy Regulatory Commission (ERC) may still scrutinize the agreement due to concerns over potential breaches of market share limitations.
The agreement involves MGEN and Chromite Gas Holdings Inc. (Chromite) acquiring a 67-percent stake in South Premiere Power Corp. (SPPC), Excellent Energy Resources Inc. (EERI), and Ilijan Primeline Industrial Estate Corp.
The three companies will also acquire 100 percent of Linseed Field Corp. (LFC), which operates an LNG terminal in Batangas City.
Chromite will hold the majority stake in the venture, while San Miguel Power will retain a 33-percent share.
ERC chairperson and CEO Monalisa Dimalanta said the regulator needs to review the Power Supply Agreements (PSAs) involving the deal.
Dimalanta also noted the ERC must ensure compliance with market share limitations mandated under the Electric Power Industry Reform Act (EPIRA).
Additionally, the ERC will evaluate the ownership of the terminal, a key infrastructure that directly impacts the fuel supply and management of the power assets. This assessment is essential to maintain fair competition and prevent any dominance in the market.
“We’ll need to revisit our decision because we need to ensure that whoever the PCC has determined to be in control — there are two sets of assets here: the two power plants and the terminal. So, whoever will end up controlling them we will need to revisit on the power plant side compliance with our market share limitations,” the ERC chief said.
While the PCC announced its decision last December, Dimalanta said the ERC is still awaiting the official document.
In approving the deal, the PCC imposed conditions to prevent anti-competitive practices, including oversight of the bidding process for power supply deals. Acquired companies must operate independently of their parent firms, with a separate management, IT system, and offices.
Power plants are also required to report unplanned outages to the PCC within seven days, and Competitive Retail Electricity Market reports must be shared. The consortium will appoint a compliance officer to ensure these rules are followed.
The safeguards will remain in place for five years, with potential extensions. Noncompliance could lead to fines of up to P2 million per day per infraction.