THE Energy Regulatory Commission (ERC) said it will study the impact on power rates as well as on market share limitations of the deal involving three power generation companies recently approved by the Philippine Competition Commission (PCC).
ERC chair Monalisa Dimalanta said in a briefing yesterday this will make sure power generators involved in the deal will not breach any limitations under the Electric Power Industry Reform Act (EPIRA).
Last month, the PCC approved the joint acquisition of power facilities and a liquefied natural gas (LNG) terminal by Meralco PowerGen Corp. (MGen), Therma Natgas Power Inc. of the Aboitiz Group and San Miguel Global Power Holdings Corp. (San Miguel Power).
Under the transaction, MGen and Therma, through their joint venture Chromite Gas Holdings Inc., are acquiring a 67-percent equity interest in South Premiere Power Corp. (SPPC), Excellent Energy Resources Inc. (EERI) and Ilijan Primeline Industrial Estate Corp.
MGEN and Therma, through Chromite, along with San Miguel Power, also jointly acquired 100 percent of Linseed Field Corp. (LFC), which operates an LNG terminal in Batangas City.
As a result of these acquisitions, MGen and Therma, through their 60/40 ownership of Chromite, will control 67 percent of SPPC, EERI and Ilijan Primeline, while San Miguel Power retains a 33-percent stake in these three entities and gains a corresponding interest in LFC.
“We’ll need to revisit our decision because we need to ensure that whoever the PCC has determined to be in control of — 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,” Dimalanta said.
ERC said it is yet to receive an official copy of the PCC decision.
“Under EPIRA, we have a limit so we will make sure that it will not be breached because there are possible scenarios where it may happen so we need to address that. And then, the issue of the ownership of the terminal because that’s very important. That’s a key infrastructure of this type of asset. Whoever controls the terminal has control over the fuel of that asset,” Dimalanta added.
Under EPIRA, no company or related group can own, operate or control more than 30 percent of the installed generating capacity (IGC) of a grid and/or 25 percent of the national IGC.
As of March 2024, the top company in terms of IGC and market share is Aboitiz Equity Ventures Inc. (AEV) with 5,745,221 kilowatts (kw), equivalent to 22.47 percent of the national share, the latest data from the ERC showed.
In Luzon, AEV has 4,633,821 kw (25.80 percent), 470,900 kw (13.78 percent) in Visayas and 640,500 kw (15.29 percent) in Mindanao.
Next is San Miguel Corp. with 5,057,360 kw at 19.78 percent in the national level; 4,576,800 kw (25.48 percent) in Luzon; 140,670 kw (4.12 percent) in Visayas; and 339,890 kw (8.12 percent) in Mindanao.
Manila Electric Co. follows with 1,380,920 kw at 5.40 percent in the national level, in which 578,700 kw (3.22 percent) is in Luzon and 802,220 kw (23.47 percent) in Visayas. It has no capacity in Mindanao.
