SMGP says Ilijan plant cleared by PEMC, disputes ERC order

San Miguel Global Power (SMGP) clarified that South Premiere Power Corp. (SPPC), owner and operator of the 1,200MW Ilijan Gas Power Plant, has already been cleared by the Philippine Electricity Market Corp. (PEMC) of any violation over the plant’s June 2022 outage. This makes the recent show cause order issued by the Energy Regulatory Commission (ERC), through its former Chair Monalisa Dimalanta, outdated and without basis.

In March 2025, PEMC’s Market Surveillance Committee (MSC), and later its Board in May, concluded that SPPC did not breach the Must Offer Rule of the Wholesale Electricity Spot Market (WESM). Their review found that the plant’s shutdown from June 5 to 25, 2022, was the result of fuel supply constraints that were beyond the company’s control.

Despite this, the ERC on July 24, 2025, issued an order based on an earlier August 11, 2022 MSC resolution, which had been endorsed to the ERC during Dimalanta’s tenure. The order directs SPPC to explain why it should not be penalized for allegedly engaging in anti-competitive behavior when the plant was on “open breaker status” during the June 2022 period, coinciding with higher spot market prices and supply alerts.

SMGP, which fully owned SPPC at that time but now holds a 33% stake after the entry of Meralco PowerGen and Aboitiz Power, said the outage was due to sudden and uncontemplated constraints in its supply of natural gas fuel after the cessation of its gas supply delivered via pipeline, which was the plant’s primary fuel for the past two decades.

It added that the disruption occurred despite diligent efforts exerted by SPPC with the previous operator of the natural gas upstream facility and pertinent agencies to address said constraints.

To avoid similar issues in the future, SMGP thru SPPC has since facilitated the construction of and commissioned an LNG terminal capable of receiving, storing, and processing natural gas for up to 2,500 MW of baseload and cleaner power generation, equivalent to about 15% of Luzon’s net dependable capacity.