A $3.3-BILLION deal involving the acquisition of power facilities and a liquefied natural gas (LNG) terminal by Meralco PowerGen Corp. (MGen), Aboitiz Power Corp.’s (AboitizPower) Therma Natgas Power Inc. (Therma), and San Miguel Global Power Holdings Corp. (San Miguel Global Power) has been approved, the Philippine Competition Commission (PCC) announced.
MGen and Therma, through their joint venture Chromite Gas Holdings Inc. (Chromite), acquired a 67-percent equity interest in South Premiere Power Corp. (SPPC), Excellent Energy Resources Inc. (EERI), and Ilijan Primeline Industrial Estate Corp.,
Another transaction with MGen and Therma, through Chromite and San Miguel Power, involved the 100-percent acquisition of Linseed Field Corp. (LFC), a company that manages an LNG import and regasification terminal in Batangas.
San Miguel Power retains its 33-percent stake in SPPC, EERI and Ilijan Primeline and a corresponding interest in LFC.
During the review process, the PCC said it identified potential competition concerns, including risks of coordination in the national power generation market and foreclosure in power supply deals with distribution utility companies (DUs).
Parent companies Pilipinas Enterprise Management Holdings Inc. (PEMHI), Aboitiz & Company Inc., and Top Frontier Investment Holdings Inc. submitted voluntary commitments on October 18 to address the issues.
Review
The PCC reviewed the commitments, with input from industry players, stakeholders, the Department of Energy (DOE), and the Energy Regulatory Commission (ERC).
On Dec. 20, the PCC approved the voluntary commitments and emphasized that while the transaction supports the country’s energy security, the imposed conditions are vital to maintaining a competitive market.
Key safeguards include PCC oversight of the Competitive Selection Process (CSP) to ensure power supply agreements (PSAs) are awarded through a transparent and competitive bidding process to prevent collusion or unfair practices.
The PCC added that the acquired companies must also operate independently of their parent companies, with strict measures to separate IT systems, offices, and management to prevent coordination or undue influence.
It also noted that the boards of directors of the acquired companies will include independent members, and internal trading units will operate independently of affiliates.
To promote transparency, the PCC said power plants must submit reports on unplanned outages within seven days of notifying the DOE.
Competitive Retail Electricity Market (CREM) reports must also be shared with the PCC, and parent companies are required to appoint a competition compliance officer to monitor the fulfillment of these commitments.
The PCC said these conditions are good for five years, with possible extensions depending on market conditions, and that violations could result in daily fines of up to P2 million per infraction until the entity fully complies, in addition to other penalties and sanctions.
AboitizPower, MGen and San Miguel Global Power released a joint statement welcoming the PCC’s decision: “We appreciate the PCC’s thorough review process and affirm their shared commitment to advancing a competitive energy market that delivers real benefits to Filipino consumers… We emphasize commitment to full compliance with all regulatory requirements and pledge to collaborate closely with stakeholders to align their efforts with the government’s energy goals.”
Meralco’s share price was up by P34 to close at P486 apiece on Monday; San Miguel Corp.’s increased by P0.25 to P87.65; and AboitizPower’s was down by P0.50 to P37.20.
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