PSALM to two power entities: Settle P671-M arrears

THE Power Sector Assets and Liabilities Management Corp. (PSALM) has sent final demand letters to two entities in the power sector for them to settle outstanding obligations worth P671.16 million, the Department of Finance (DoF) said in a press release on Tuesday.

The DoF said PSALM President-CEO Irene Joy Besido-Garcia and its acting Vice-President for Finance Manuel Marcos M. Villalon II sent a formal and final demand letter to Abra Electric Cooperative, Inc. (Abreco), with arrears of P599.13 million on its power account and another P36.89 million in unremitted universal charge (UC) collections, as well as its other unremitted UC collections for the months not covered by the submitted reports.

It said PSALM also sent a formal and final demand letter to First Bay Power Corp. (FBPC) to remind the company of its financial obligations to the agency worth P35.15 million.

The two entities have seven days from receipt of the letter to pay or “face legal actions,” according to the DoF. The final demand letters were dated Aug. 24, 2020.

“[PSALM] shall be constrained to avail of all appropriate legal remedies to protect PSALM and the Government’s interest, including the filing of criminal, civil, and administrative cases as well as against your officers and directors for the extreme prejudice you have caused PSALM and the Philippine government,” the letters read, a copy of which were also provided to DoF Secretary Carlos G. Dominguez III, who also chairs PSALM, and Energy Secretary Alfonso G. Cusi.

The DoF said the overdue power account of Abreco covers a period of 10 years to July 31. It consists of restructured account (RA), interest and penalty, value-added tax (VAT) and power rate adjustments approved by the Energy Regulatory Commission (ERC).

Ms. Garcia was quoted as saying that PSALM has given the company written demand letters to ask for payment but “up to this date, [Abreco] continues to ignore the demand letters.”

According to the DoF, the cooperative said it would submit a payment option for its outstanding power account dues on Dec. 9, 2019, and that it had been entering restructuring agreements with PSALM. These have been also breached, the department said.

It said PSALM provided a new restructuring program on Dec. 20, 2019, but was also “ignored.” PSALM’s record of Abreco’s unremitted UC collections were based on reports submitted by the cooperative between February 2003 and December 2015, and does not include yet the unremitted collections from 2016 to date.

The DoF statement quoted Ms. Garcia as saying that PSALM previously sent letters to Abreco “urging it to remit in full its UC collections, but these were also ignored.”

Meanwhile, FBPC’s outstanding debt estimated at P35.15 million covers seven years to July 31, and includes its power bill, interest and VAT, and ERC-approved power rate adjustments.

PSALM had also been issuing statements of accounts to the cooperative, which, according to the DoF, were all “ignored.”

Ms. Garcia warned that FBPC’s overdue account will continue to accumulate interest until the total amount has been fully settled.

BusinessWorld reached out to Abreco and FBPC, but did not get any response from calls, messages and e-mails at the deadline time. — Beatrice M. Laforga