PSALM claims P15B loss in Mindanao
MANILA, Philippines – State-run Power Sector Assets and Liabilities Management Corp. said it has incurred losses amounting to as much as P15 billion from 2001 to 2011 from operating the government’s power facilities in Mindanao.
PSALM disclosed the figures on Sunday to belie allegations that the government has been generating profits from its electricity sales in Mindanao, as well as to ensure the “utmost transparency to all relevant sectors as to the actual financial position of the Mindanao plants’ operations.”
The P15 billion losses, however, will be assumed by PSALM and passed on to all power consumers through the imposition of the universal charges for stranded contract costs and stranded debts. The approval for the petition to start collecting the UC remained pending with the Energy Regulatory Commission.
PSALM president and chief executive officer Emmanuel R. Ledesma Jr. explained that while the operation of hydro power plants, specifically the 646-megawatt Agus and Pulangi facilities, results in operating profits, the government has been incurring losses from the operation of its coal, geothermal, and diesel-fired plants.
These losses significantly exceed the revenues generated from the hydro plants, he stressed.
“In fact, the cost of producing electricity from these facilities is more than the time-of-use rate imposed on Mindanao consumers,” he added.
Ledesma further pointed out that the revenues generated from the hydro plants are being used to cover the operating losses from these facilities.
PSALM currently sources additional capacity from these facilities to meet the demand of Mindanao consumers in view of the limited and intermittent supply from the hydro plants.
Another major consideration, Ledesma said, would be the capital expenditures incurred for plant maintenance and rehabilitation. This has not been taken into account in the calculation of the plants’ operating income.
At present, the government still owns and manages the contracted capacities of several power facilities in Mindanao including the Agus and Pulangi facilities, a diesel fired power barge in Davao, Southern Philippines Power Corp.’s (SPPC) Bunker-C fired power station in Sarangani; and Western Mindanao Power Corp.’s (WMPC) diesel-fired generating facility in Zamboanga City, among others.