POWER Sector Assets and Liabilities Management Corp. (PSALM) said it is not blaming the Energy Regulatory Commission (ERC) for the interest cost it incurred in securing funding to pay maturing debt.
“The computation of PSALM simply presents the cost of contracting loans to supplement the needed funds to pay maturing debts while awaiting approvals of its UC-SCC (universal charge-stranded contract costs) and SD (stranded debts) applications filed with the ERC,” PSALM President and Chief Executive Officer Irene Joy B. Garcia, said in a statement on Thursday night.
PSALM is reacting to statement by a group of electric cooperatives claiming that the agency tasked to privatize government power assets was blaming the ERC for its rising costs. The cooperatives were citing proceedings during a Senate hearing.
On Wednesday, the ERC clarified that some of the applications of PSALM to recover stranded debt and stranded contract costs have yet to complete the legal process or hearings. Other petitions that are up for decision need rulings from the commission sitting en banc.
The ERC needs a vote of three of its five commissioners to decide rate-setting cases. It currently has only its Chairperson Agnes T. Devanadera as two commissioners retired, while the two others were suspended.
PSALM also clarified that it is not accurate to state that it has “ballooning debts.”
It said the total liabilities that PSALM assumed from the National Power Corp. (Napocor) amounted to P1.24 trillion in 2003. It said as of June 30, 2018, the remaining principal debt of PSALM is down to P246.73 billion, while the remaining obligations under its independent power producer (IPP) contracts amount to P202.7 billion.
PSALM said it had cut down the financial obligations to P449.4 billion or equivalent to a 64.35% reduction.
“PSALM adheres to full transparency. Its records show that privatization proceeds are utilized to pay its financial obligations. The Commission on Audit validates PSALM’s books,” Ms. Garcia said.
PSALM said it had generated privatization proceeds from assets amounting to P918.5 billion, of which it had collected P545.2 billion. The the balance is based on a payment schedule.
The agency said it had recently privatized more than 900 hectares of real estate power assets. It has also sold Power Barge 104 and the decommissioned Sucat Thermal Power Plant.
The privatization process of the Manila Thermal Power Plant will start this month, while the privatization of the Malaya Thermal Power Plant will also start before the end of the year, PSALM said. — Victor V. Saulon