By Chino S. Leyco
The Department of Finance (DOF) identified yesterday several independent power producer administrators (IPPAs) and electric cooperatives with long overdue accounts with the state-run Power Sector Assets and Liabilities Management Corp. (PSALM).
In a statement, the DOF said these IRRAs and electric cooperatives owe PSALM some P59.23 billion in overdue accounts, many of which were transferred by the National Power Corp. (Napocor) to the agency mandated to liquidate the financial obligations of the later.
In a report to Finance Secretary and PSALM Chairman Carlos G. Dominguez III, several IPPAs have pending overdue accounts with the state-owned firm amounting to P28.46 billion as last year. Many of them are contesting the amounts due in courts or in arbitral tribunals.
San Miguel Corp.’s South Premiere Power Corp., led by its President, Elenita Go and which administers the Ilijan gas-fired power plant in Batangas City, has the highest unpaid obligation due to PSALM, in the sum of P19.75 billion.
PSALM earlier terminated the IPPA, but the termination has been enjoined by the courts.
Vivant-Sta. Clara Northern Renewables Generation Corp., formerly owned by Vivant Energy and Sta. Clara Power Corp., owes P3.86 billion to PSALM, which awarded it an IPPA contract for the Bakun Hydroelectric Power Plant in Ilocos Sur. Vivant-Sta. Clara filed a petition for rehabilitation.
It was recently purchased by North Renewable Energy Corp, but despite the change in ownership, no payment has been made to PSALM for its overdue accounts.
The Good Friends Hydro Resources Corp. of Lucio Lim Jr. has yet to pay PSALM P1.16 billion, while FDC Utilities, Inc. led by Juan Eugenio Roxas as its president-CEO and a subsidiary of Filinvest Development Corp., owes P1.12 billion. Both IPPAs were involved with the contract to administer the Unified Leyte Geothermal Power Plants.
A Filinvest Utilities subsidiary, the FDC Misamis Power Corp., also owes PSALM P2.56 billion, as the previous IPPA for the Mindanao I and II Geothermal Power Plants.
“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 Corporation,” 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 USD 1.1 Billion for obligations maturing this end of May 2019,” she added.
As a result, PSALM had to pay interest, guarantee fees and other finance charges of about P2.62 billion per year. Had the IPPAs and electric cooperatives paid, PSALM would not incur this much additional costs.
Dominguez noted that “all these borrowing costs could have otherwise been utilized by the Government for the construction of public school classrooms or to build roads and bridges.”
Dominguez instructed PSALM to relentlessly pursue collection efforts against these IPPAs and use all remedies available to protect the rights of the government and the Filipino people.
The PSALM report also listed 10 electric cooperatives and industries with the largest unpaid obligation due to PSALM with a combined total of P28.74 billion as of December last year.
The Lanao del Sur Electric Cooperative has, the highest overdue account, amounting to P9.63 billion.