Olongapo LGU faces legal suit for P 6.7-B unpaid power bill

The state-run Power Sector Assets and Liabilities Management Corp. (PSALM) has warned Olongapo City of legal action as it seeks payment of P6.71 billion in electricity bills and charges that have remained unpaid for more than a dozen years, the Department of Finance (DOF) said.

In a statement on Monday, the DOF said PSALM president and chief executive Irene Besido-Garcia as well as acting vice president for finance Manuel Marcos Villalon II recently sent a final demand letter to Olongapo City Mayor Rolen Paulino, giving the local government unit (LGU) seven calendar days upon receipt of the letter to pay.

Failure to settle the obligations of Olongapo City’s public utilities department will force the state-run corporation to “avail [itself] of all appropriate legal remedies to protect PSALM and the government’s interests, including the filing of criminal, civil and administrative cases” against Paulino and other top city officials, Garcia and Villalon said.

The DOF said Olongapo City’s accumulated unpaid bills included power bills with interest and 12-percent value-added tax (VAT), P5.66 billion; default wholesale supplier arrangement charges with interest and VAT, P813.77 million; deferred accounting adjustment charges with interest and VAT, P230.71 million, and VAT on the automatic cost recovery mechanism, P8.72 million.

According to the DOF, PSALM already sent the Olongapo City local government a final demand letter in May last year, when the unpaid obligations covering a nine-year period were a lower P6.18 billion.

“The [local government] responded by remitting P20 million in July and December last year, leaving a still substantial amount of arrears unpaid,” the DOF said.

Citing a report from PSALM, the DOF said the outstanding obligations stood at P6.71 billion covering a period of more than 12 years as of July, “and will continue to increase if it remains unpaid.”

Since April 2012, PSALM had been asking Olongapo City to pay its arrears, which eight years ago amounted to a smaller P3.58 billion, the DOF said. INQ