Phinma asks court to stop PSALM from terminating Leyte power contract
Phinma Energy Corp. has asked the Makati City Regional Trial Court (RTC) to stop the state-run Power Sector Assets and Liabilities Management Corporation (PSALM) from terminating the firm’s contract for the output of a Leyte geothermal power plant and declaring it in default.
Phinma recently filed a civil case for damages with a plea for a temporary restraining order (TRO) and a writ of preliminary injunction (WPI) to stop PSALM from terminating the Administration Agreement for the Selection and Appointment of Independent Power Producer Administrators for the Strips of Energy of the Unified Leyte Geothermal Power Plants (ULGPP).
“Strips of energy” refers to the capacity of a plant that range from 1 to 40 megawatts. Phinma—formerly called Trans-Asia Oil and Energy Development Corporation—was one of the seven winners of the independent power producer administrator (IPPA) contracts for the Tongonan, Leyte, plant announced in November 2013.
“The grant of the prayer for a temporary restraining order will restrain PSALM from terminating the agreement on the ground of administrator’s default and prevent Psalm from asserting any further claim to the detriment of the Corporation,” the suit read.
It may be recalled that PSALM only awarded the strips to the IPPA contractors after a 1-year delay following the onslaught of devastating supertyphoon Yolanda, which resulted in extensive damage to the ULGPP.
Phinma sought to renegotiate the agreement and proposed several measures for relief, but later expressed difficulties and wrote to exercise its right to withdraw from the agreement.
Instead, PSALM moved to terminate the agreement on the grounds of administrator’s default and forfeit the performance bond posted by Phinma.
Phinma thus sued PSALM to avoid opening itself up to possible financial claims by the state firm.