Power firms, coops owe PSALM P95B

February 19, 2020

A JOINT House panel on Wednesday discovered some P95.3 billion unpaid debts of power firms and electric cooperatives to Power Sector Assets and Liabilities Management Corp. (PSALM), which might be passed on to the Filipino people in the future.

During the joint House committees on public accounts and on good government hearing, PSALM lawyer Irene Joy Besido-Garcia bared this information through a power point presentation before lawmakers on the arrears or overdue receivables by the agency it inherited in the past after power plants where sold to private companies.

“Ultimately, your honors, it is the national government that will have the burden of paying this amount come June 2026 when PSALM’s life will expire,” Besido-Garcia told the lawmakers when asked if President Duterte knew about the matter, adding that PSALM has a total of P422 billion in arrears.

Based on the data she presented, it was shown that South Premiere Power Corp. (SPPC) under San Miguel Corp. had an outstanding P23.9 billion debt -- or “overdue receivables” since December 2019 which has been under litigation.

The SPPC is under the independent power producer administrator Agreement (IPPA) with PSALM for the 1,200-megawatt (MW) natural gas-fired power plant in Ilijan, Batangas.

Besido-Garcia also bared overdue accounts for generation payments under the IPPA from Northern Renewables Generation Corporation at P4.579 billion, FDC Misamis Power Corp. at P2.630 billion, FDC Utilities Inc. at P1.167 billion, Good Friends Hydro Resources Corp. at P1.214 billion and Waterfront Mactan Casino Hotel Inc. at P87 million.

According to her, PSALM is set to receive P14.9 billion from Manila Electric Company (Meralco) under litigation, for reconciliation and adjustment payment.

Anakalusugan party-list Rep. Mike Defensor, who chairs the House Committee on Public Accounts, and Bulacan Rep. Jonathan Sy-Alvarado, chairman of the House Committee on Good Government, called the firms in the next congressional hearing.

“Most of them have not paid yet. They will be called to the next hearing. The government could earn a lot from these from the collection,” Defensor said. “These overdue accounts should be paid by the power firms. At the end, the public would carry the burden of paying these, not the government.”

“I’m asking if the President knows this because he will definitely get angry once he learns about this. If he got mad at the P11 billion arrears of the two water concessionaires, how much more with this? I’m almost sure he’ll go ballistic over this,” Defensor told Garcia.

While she has no personal knowledge if the President has been informed on the arrears, she said that the Department of Finance (DOF) knew everything.

Besido-Garcia agreed that the people are the ones who will shoulder the debts.

“Kapag malalaking kumpanya ginugulangan ang gobyerno. Nakakairita ito sa taumbayan dahil sa sila ang magbabayad sa utang na ito ng mga private companies,” said Alvarado.

The debts are under the independent power producers administration (IPPA) with a total of P33.6 billion.

The power and universal charges have reached P35.4 billion while others (litigation, collection etc.) totaled P26.3 billion, thereby having a sum total of P95.3 billion.

The role of PSALM, after the state-owned National Power Corporation (Napocor) sold the power assets to private companies, is to collect the debt but which they couldn’t do after some firms went to the Supreme Court to question the process.

PSALM is responsible for the assets that were privatized under the Electric Power Industry Reform Act (EPIRA Law).