PSALM cuts off electric supply to 2 power coops

State-run Power Sector Assets and Liabilities Management Corp. (PSALM) will curtail power supply to Maguindanao Electric Cooperative Inc. (MAGELCO) and cut supply to Lanao del Sur Electric Cooperative Inc. (LASURECO) on May 26 for failure to settle over P16 billion in unpaid electricity bills.

This was instructed by the Department of Finance (DOF) as part of strictly enforcing credit and collection policy on the two power coops.

In a statement, the DOF said PSALM should not give free electricity to MAGELCO and LASURECO because it is not the agency's mandate to subsidize electricity costs and it does not have the budget to do so.

The poor payment performance of MAGELCO and LASURECO has been a long-standing problem, stemming from both cooperatives' financial mismanagement and low collection efficiency from consumers.

With a massive amount up for collection, PSALM is compelled to incur more borrowings to cover the ever-widening shortfall.

PSALM said it has repeatedly demanded payment from MAGELCO and LASURECO, with the threat to curtail their energy allocation should they fail to settle in full their power bills and to limit their power allocation equivalent to their actual payments to the agency.

The power curtailment for MAGELCO and disconnection to LASURECO should bring an end to the ballooning financial obligations of the two power cooperatives, the DOF said.

MAGELCO has only paid P45.5 million out of the total power bill amounting to P147.2 million from December 2021 to April 2022.

As of April 30, MAGELCO has outstanding payables to the government amounting to P3.8 billion.

On the other hand, LASURECO's outstanding payables to PSALM amounted to P12.9 billion as of end-April, representing outstanding power bills.

To date, LASURECO has not expressed intention to settle its outstanding accounts with PSALM.

Because of this, the DOF directed PSALM to commence the disconnection of LASURECO from the Agus 1 Hydroelectric Power Plant.

In addition to abovementioned outstanding power bills, MAGELCO and LASURECO likewise have unremitted universal charges (UC) amounting to P29 million and P9.5 million, respectively, which they have already collected from electricity end users.