Finance Secretary Carlos Dominguez III has tasked the Power Sector Assets and Liabilities Management Corp. (PSALM) to demand payment from 20 Independent Power Producer Administrators (IPPAs) and electric cooperatives that owe the government P59.23 billion as of December 2018.
Most of these accounts have been moved from the National Power Corp. (Napocor) to PSALM in 2001 by virtue of the Electric Power Industry Reform Act Act .
Dominguez said the government would use the funds collected to build more roads and schools.
In a PSALM report to Dominguez, who is chairman of the board of the state-run firm, some IPPAs have overdue accounts worth P28.46 billion.
South Premiere Power Corp., which runs the Ilijan gas-fired power plant in Batangas City, has the biggest debt with PSALM at P19.75 billion.
PSALM earlier terminated this IPPA, “but the termination has been enjoined by the courts,” the Department of Finance said.
Another PSALM debtor is Vivant-Sta. Clara Northern Renewables Generation Corp. (Vivant-Sta. Clara), formerly under Vivant Energy and Sta. Clara Power Corp., at P3.86 billion. It received an IPPA contract for the Bakun Hydroelectric Power Plant in Ilocos Sur.
Good Friends Hydro Resources Corp. also owes PSALM P1.16 billion, while FDC Utilities Inc. has a P1.12-billion debt. Both IPPAs have contracts to run the Unified Leyte Geothermal Power Plants.
Another Filinvest Utilities subsidiary, the FDC Misamis Power Corp., also owes PSALM P2.56 billion, as the first IPPA holder for the Mindanao I at II Geothermal Power Plants.
“Due to these overdue accounts, the Government through PSALM is constrained to resort to borrowings that the National Government guarantees, 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 US$1.1 Billion for obligations maturing this end of May 2019,” she added.
Owing to these debts, Garcia said PSALM must pay interest, guarantee fees, and other finance charges reaching P2.62 billion each year. “Had the IPPAs and electric cooperatives paid, PSALM would not incur this much additional costs,” she added.