IPPAs, electric coops owe PSALM P59.23B as of end-2018 —report

Independent Power Producer Administrators (IPPAs) and electric cooperatives owe state-run Power Sector Assets and Liabilities Management Corp. (PSALM) a combined P59.23 billion as of end-2018.

Citing a report by PSALM, the Department of Finance (DOF) said several IPPAs have pending overdue accounts worth P28.46 billion with the state-run firm, some of which are being contested in arbitral tribunals.

South Premier Power Corp. (SPPC), a unit of San Miguel Corp. (SMC), was reported to have the highest unpaid obligations with P19.75 billion.

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

PSALM is tasked to privatize the generation assets of National Power Corp. (NAPOCOR) and the transmission assets of the National Transmission Corp. (TransCo.)

SPPC was followed by Vivant-Sta. Clara Northern Renewables Generation Corp., which owes PSALM P3.86 billion.

Formerly owned by Vivant Energy and Sta. Clara Power Corp., the company was recently purchased by North Renewable Energy Corp., but the DOF said no payment has been made despite the change in ownership.

Other IPPAs which owe PSALM are Good Friends Hydro Resources Corp. with P1.16 billion, FDC Utilities Inc. with P1.12 billion, and FDC Misamis Power Corp. with P2.56 billion.

"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," said PSALM President-CEO Irene Joy Garcia.

"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.

In turn, PSALM said it had to incur additional costs as it paid interests, guarantee fees, and other finance charges amounting to P2.62 per year.

"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," said Finance Secretary Carlos Dominguez III.

The PSALM also listed 10 electric cooperatives with unpaid obligations totaling P28.74 billion as of December 2018.

This includes Lanao del Sur Electric Cooperative (P9.63 billion); Public Utilities Department of Olongapo City (P6.07 billion); PICOP Resources Corp. (P2.96 billion); former Albay Electric Cooperative Inc. (P2.61 billion); and the Maguindanao Electric Cooperative Inc. (P1.76 billion).

Also included in the list is former Global Steelworks International Inc. (P1.68 billion); Pampanga III Electric Cooperative Inc. (P1.27 billion); Davao del Norte Electric Cooperative Inc. (P1.24 billion); Magellan Cogeneration Inc. (P750.86 million); and former Bacnotan Steel Corp. (P743.68 million).

Other electric cooperatives said to have pending obligations are Northern Samar Electric Cooperative Inc. (P742.13 million); Sorsogon II Electric Cooperative Inc. (P510.15 million); Samar I Electric Cooperative Inc. (P303.04 million); Zamboanga del Sur II Electric Cooperative Inc. (P275.69 million); and Sorsogon I Electric Cooperative (P206.23 million). —KBK, GMA News