PSALM seeks condonation of problematic receivables

By Myrna M. Velasco – October 23, 2022, 8:00 PM
from Manila Bulletin

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) is seeking the help of the national government (NG) for possible condonation of “swelling” debts of its problematic customer-accounts, primarily the liabilities of electric cooperatives (ECs) that have been rising in billions of pesos through the years.

In a budget briefing in the Senate, newly installed PSALM President Dennis Edward Dela Serna noted that the major problematic account that the company has been recommending for condonation is its P13-billion receivables from the Lanao del Sur Electric Cooperative (LASURECO) – and that could be absorbed either by the National Electrification Administration (NEA) or the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

“We have made suggestions to NEA and BARMM to properly deal with the LASURECO problem. We believe that the best entity to solve the problem is themselves – the national government through NEA will absorb the payment; or the payment will be absorbed by BARMM,” he said.

Dela Serna added that part of their proposal will be for BARMM to take over the operations of LASURECO, with him stressing that “it’s the solution we’re seeing because the people in the area refuse to pay.”

He conveyed that a “disconnection notice” had been previously served to the power utility, but was never enforced. And while there were also discussions for “special payment arrangement”, the same proffered solution had not been concretized.

“We’ve sent notices of disconnection but those have not been implemented. We’ve been working with BARMM and NEA to try to obtain assistance of this particular problem – we’ve tried to enter into special payment arrangement, but then again, the special payment arrangement has not been met,” the PSALM chief executive stressed.

For the other problematic accounts of PSALM, Dela Serna stated that what’s being batted for would be a write-off of interest payments to prevent further swelling of the liabilities of the delinquent power utilities.

He indicated that “a major portion of the debts would account for interests – so part of the discussion we’re having with the national government is: if it’s possible to remove that portion – although we are not sure if that is an act of Congress or an act of the national government.”

Apart from LASURECO, the other major receivables of PSALM include Public Utilities District (PUD) of Olongapo for P7.2 billion; PICOP Resources for P3.3 billion; Maguindanao Electric Cooperative (MAGELCO) for P3.3 billion; Albay Electric Cooperative (ALECO) for P3.1 billion; and Pampanga Electric Cooperative for P1.5 billion.

Dela Serna emphasized that some electric cooperatives have partial payment arrangements with PSALM, but since they are just paying 10-percent to 25-percent of their financial obligations, it was deemed not sustainable.

Hence, Dela Serna said, scrapping of the interest component of the debts would enable these power utilities to catch up on their payments.