PSALM studies SMC prepay offer

THE government is considering the offer of San Miguel Corp. (SMC) subsidiary South Premiere Power Corp. (SPPC) to pay in advance its obligations for administering a 1,200-megawatt power plant in Batangas.

“We will study it,” Irene J. Besido-Garcia, president and chief executive officer of the Power Sector Assets and Liabilities Management Corp. (PSALM), told the House committee on public accounts and the committee on good government and public accountability on Wednesday.

On Monday, SPPC announced that it was willing to pay ahead P22.68 billion representing the accumulated monthly payments to PSALM between this month up to June 2022.

SPPC had said that under its original independent power producer administration (IPPA) agreement with PSALM, the SMC unit is supposed to pay the state firm fixed monthly payments for its right to market the energy capacity from the Ilijan, Batangas power plant.

Administrators of these agreements are qualified private entities that manage the output under the contracts entered into by state-led National Power Corp. with independent power producers. They are appointed through public bidding conducted by PSALM.

SPPC General Manager Elenita D. Go told the two committees on Wednesday that the offer is “without prejudice” to the SMC subsidiary pursuing the case it filed against PSALM in 2015, which is pending with Branch 208 of the Mandaluyong City Regional Trial Court.

The energy firm is contesting the P23.94 billion in alleged debts that PSALM last month said it would run after. SPPC is asserting another formula for computing its payables to PSALM.

Anakalusugan Partylist Rep. Michael T. Defensor and chair of the committee on public accounts said in a statement on Wednesday that the other four companies had also committed to settle their financial obligations to the government.

The companies are Manila Electric Co. (Meralco), which has an indebtedness of P15 billion; Northern Renewables Generation Corp., with P4.6 billion; Filinvest Development Corp. (FDC) Misamis Power Corp., which owes P2.6 billion; and FDC Utilities, Inc., which has a P1.2-billion debt.

“We can collect P15 billion from Meralco because the office of Solicitor General Jose [C.] Calida is willing to withdraw its motion for intervention that has delayed the implementation of the settlement agreement between Meralco and PSALM,” he said.

Mr. Defensor noted that the House hearings prompted the electricity producers and distributors to pay their obligations.

“Since we started the inquiry, there has been a lot of movement in the energy sector. We have to help the government collect the huge indebtedness of P95.4 billion or this would eventually be absorbed by Filipino consumers in terms of higher electricity rates,” he said.

The congressman added that the money can be used to “augment the funds of the Department of Health and government hospitals in containing the spread of the coronavirus disease and in treating patients.”— Genshen L. Espedido