ERC's not involved in PSALM and YNN negotiations
“The Energy Regulatory Commission (ERC) has nothing to do with the discussions and negotiations between the Power Sector Assets and Liabilities Management Corporation (PSALM) and the YNN consortium regarding the sale of the National Power Corporation’s (NPC) Masinloc power plant”, ERC Chairman Rodolfo B. Albano, Jr. said. This statement is issued in the light of the recent media commentaries that insinuated ERC’s influence in the said sale.
On 26 May 2006, PSALM rejected the YNN’s proposal to attach a bilateral power supply contract to its US$14 million performance bond which PSALM will confiscate in the event that YNN fails to deliver the US$227 million upfront payment. The said US$227 represents 40% of the winning bid price of US$562 million which was almost double the bid of the First Gen Corporation of US$275 million. In rejecting YNN’s proposal as an additional condition, PSALM, however, affirmed its decision to extend the deadline to provide the transaction a leeway to succeed, it being US$335 million higher in the bid price and considering the difficulty of duplicating the bid should PSALM call for a rebidding prior to the deadline.
“As to the alleged temporary freeze of the guidelines to conveniently open a window for possible sweetheart deal between YNN and Manila Electric Company (MERALCO), we wish to emphasize that ERC Resolution No. 21 was issued in reaction to the concerns raised by distribution utilities (DUs), like Cagayan Electric Power and Light Company, Inc. (CEPALCO), on the amendment of a prior ERC Resolution”, the Chairman exclaimed. “To obviate a possible legal challenge to the validity of the aforecited rules (following a Supreme Court’s decision on a precedent case requiring conduct of public hearings), the suspension of the amendment and the conduct of public hearings will afford all affected parties to submit their views and proposals”, the Chairman added.
Contrary to the assertions in the media commentaries, ERC Resolution No. 21 bore the signatures of three (3) Commissioners and the Chairman. The lone Commissioner who was not able to sign said resolution was on official travel when the same was promulgated.
Finally, as to the alleged interest of Comm. Alcordo in related industries, Chairman Albano clarified that Comm. Alcordo had already divested as early as December 2000 his shareholdings in East Asia Power Resources Corporation which is the holding company of Duracom Mobile Power Corporation and East Asia Diesel Power Corporation, among others. “Aside from his early disclosure, the ERC’s records will also show that Comm. Alcordo, for purposes of transparency and out of “delicadeza”, has always inhibited himself from public hearings, deliberations and decisions of the ERC involving the energy companies he was formerly connected with”, Chairman Albano stressed.
June 5, 2006