IPP administrators, coops owe P59.23 B to PSALM

MANILA, Philippines — Several independent power producer administrators (IPPAs) and electric cooperatives owe the Power Sector Assets and Liabilities Management Corp. (PSALM) P59.23 billion in combined obligations as of end-2018, according to the Department of Finance.

Citing a report made by PSALM to Finance Secretary Carlos Dominguez, the DOF said some IPPAs still have pending overdue accounts with the state firm amounting to P28.46 billion as of end-December 2018.

PSALM also said at least 15 electric cooperatives and industries have unpaid obligations amounting to P30.77 billion over the same period.

The DOF said these accounts were transferred by the National Power Corp. to PSALM in 2001, by virtue of Republic Act 9136 or the Electric Power Industry Reform Act.

According to the DOF, South Premier Power Corp., a subsidiary of San Miguel Corp., has the highest unpaid obligation due to PSALM amounting to P19.75 billion.

“PSALM earlier terminated the IPPA, but the termination has been enjoined by the courts,” the DOF said.

This was followed by Vivant-Sta. Clara Northern Renewables Generation Corp. (Vivant-Sta. Clara), previously owned by Vivant Energy and Sta. Clara Power Corp, which owes P3.86 billion to PSALM.

The company was recently purchased by North Renewable Energy Corp., but the DOF said no payment has been made to PSALM for its overdue accounts.

The DOF said Good Friends Hydro Resources Corp. Also has unpaid obligations to PSALM totaling P1.16 billion, while FDC Utilities Inc. (Filinvest Utilities), a subsidiary of Filinvest Development Corp., still owes P1.12 billion.

Both IPPAs were involved with the contract to administer the Unified Leyte Geothermal Power Plants.

Moreover, the DOF said the FDC Misamis Power Corp., a unit of Filinvest Subsidiaries also owes PSALM P2.56 billion, as the previous IPPA for the Mindanao I and II Geothermal Power Plants.

The DOF said some of the IPPAs are contesting the amounts due in courts or in arbitral tribunals.

“Due to these overdue accounts, the government through PSALM is constrained to resort to borrowings that the national government guarantees, in order for PSALM to timely fulfill its mandate of liquidating the financial obligations of the National Power Corp.,” PSALM president-CEO Irene Joy Garcia said.

“In fact, in 2018, PSALM borrowed about P23 billion to cover its maturing obligations, and PSALM is set to borrow $1.1 billion for obligations maturing this end of May 2019,” she said.

As a result, Garcia said PSALM has to pay interest, guarantee fees and other finance charges of about P2.62 billion per year.