SMC unit asks ERC to amend public offer rules for DUs, gencos

BY LENIE LECTURA – JANUARY 27, 2022
from Business Mirror

SMC Consolidated Power Corp. (SCPC) is asking the Energy Regulatory Commission (ERC) to amend the public offering requirements for power generation companies (gencos) and distribution utilities (DUs).

The power arm of San Miguel Corp. (SMC), in its petition filed with the commission, “seeks the amendment of the 2011 and 2019 ERC Resolutions, and proposes to consider that the listing of the ultimate parent company of gencos and DUs, reaching up to the reasonable sixth level of corporate relations, as compliant to the public offering requirement.”

Under the Electric Power Industry Reform Act of 2001, all private gencos and DUs not publicly listed shall offer and sell to the public a portion of not less than 15 percent of their common shares of stocks. If their respective holdings companies are already listed on the Philippine Stock Exchange, they are already deemed complaint.

However, the ERC resolutions limit to only two corporate layers the determination of whether a genco or DU will be considered as deemed in compliance with the public offering requirement.

SCPC, which operates the Limay plant, is seeking renewal of its certificate of compliance from the ERC. However, it needs to submit proof of compliance with public offering requirements.

SCPC said there is a basis to consider SMC as the holdings company of SCPC as it holds SCPC as part of a conglomerate or umbrella structure with other subsidiaries.

“There is a need to amend 2011 and 2019 Resolutions to incorporate the application of the Grandfather Rule and the definition of the Honorable Supreme Court of holding companies in ascertaining compliance with the Public Offering Requirement,” SCPC said.

Consequently, SCPC asked the ERC to suspend the implementation of the 2011 and 2019 Resolutions pending resolution of its petition. “This is so that gencos and DUs similarly situated as petitioner will not be unduly penalized or negatively affected until this matter is properly resolved by the Commission.”

The ERC will hold a public consultation next month.

“Considering the foregoing, SCPC has a substantial interest in the amendment of the 2011 and 2019 Resolutions, as well as the suspension of the implementation of the same pending the resolution of the issue at hand so its COC can be renewed for all intents and purposes,” SCPC said.