Makati City Bakuna

‘Power firms owe government P95 billion'

A joint committee in the House of Representatives on Wednesday discovered P95.3 billion in unpaid debts by the power firms and electric cooperatives to the Power Sector Assets and Liabilities Management Corp.

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As a result, those debts will be passed on to the Filipino people.

PSALM lawyer Irene Joy Besido-Garcia made the disclosure to lawmakers at a hearing conducted by the House committees on public accounts and on good government hearing led by Representatives Michael Defensor and Jonathan Sy-Alvarado, respectively.

In her powerpoint presentation, Besido-Garcia said the arrears or “overdue receivables” by the agency were inherited in the past after the  power plants where sold to private companies.

 ‘‘Ultimately, your honors, it is the national government that will have the burden of paying this amount come June 2026 when PSALM’s life will expire,” Besido-Garcia said in response to a query from lawmakers if President Rodrigo Duterte knew about the matter, adding that PSALM had a total of P422 billion in arrears.

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Besido-Garcia said South Premiere Power Corp. under San Miguel Corp. had an outstanding P23.9 billion in debt or “overdue receivables” since December 2019 and had been under litigation.

The SPPC is under the independent power producer administrator Agreement with PSALM for the 1,200-megawatt natural gas-fired power plant in Ilijan, Batangas.

Besido-Garcia also disclosed the overdue accounts for generation payments under the IPPA from Northern Renewables Generation Corp. at P4.579 billion, FDC Misamis Power Corp. at P2.630 billion, FDC Utilities Inc. at P1.167 billion, Good Friends Hydro Resources Corp. at P1.214 billion, and Waterfront Mactan Casino Hotel Inc. at P87 million.

She said PSALM was set to receive P14.9 billion from Manila Electric Co. under litigation for reconciliation and adjustment payment.

This developed as Defensor and Alvarado moved that the firms be invited in the next congressional hearing.

“Most of them have not paid yet. They will be called for the next hearing. The government could earn a lot from these from the collection,” Defensor said. 

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 ‘‘These overdue accounts should be paid by the power firms. In the end, the public would carry the burden of paying these, not the government.

 ‘‘I’m asking if the President knows this because he will definitely get angry once he learns about this. If he gets mad at the P11 billion arrears of the two water concessionaires, how much more to this? I’m almost sure he’ll go ballistic over this.”

While she had no personal knowledge if the President had been informed of the arrears, she said the Department of Finance knew everything.

Besido-Garcia agreed that the people were the ones who would shoulder the debts.

The debts are under the independent power producers administration with a total of P33.6 billion.

The power and universal charges are pegged at P35.4 billion while the others (litigation, collection, etc.) totaled P26.3 billion for a total of P95.3 billion.

The role of PSALM, after the state-owned National Power Corporation sold the power assets to private companies, is to collect the debt but it could not do that after some firms went to the Supreme Court to question the process.

PSALM is responsible behind the assets that were privatized under the Electric Power Industry Reform Act.

Topics: House of Representatives , unpaid debts , Power Sector Assets and Liabilities Management Corp. , Irene Joy Besido-Garcia
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