MANILA, Philippines — The Department of Finance (DOF) told state-run Power Sector Assets and Liabilities Management Corp. (PSALM) to disconnect Lanao del Sur Electric Cooperative, Inc. (Lasureco) from the grid and curtail Maguindanao Electric Cooperative, Inc.'s (Magelco's) supply of power after failing to settle their outstanding debts of over P16 billion in total.
Both electric cooperatives (ECs) were also unable to pay their current power bills on time.
Related Stories
In a statement on Wednesday, DOF said PSALM should not give "free electricity" to Magelco and Lasureco because it is not the government entity's mandate to subsidize such costs, and because PSALM does not have the budget to do so.
Citing alleged financial mismanagement from the cooperatives and low collection efficiency from consumers, both power distributors were not able to pay their obligations, causing PSALM to incur more borrowings to cover the shortfall, according to DOF.
"To bring an end to the ballooning financial obligations of Magelco and Lasureco, the DOF has ordered PSALM to commence the curtailment for Magelco and disconnection for Lasureco starting 26 May 2022," the department said.
Magelco has only paid P45.5 million or around 31% of its total power bill for the billing period covering December 2021 to April 2022. The EC also has outstanding payables of P3.8 billion to the Philippine government, as of end-April.
Meanwhile, Lasureco has incurred a total of P12.9 billion worth in outstanding power bills last month. The cooperative did not express any intention to settle their obligations, DOF claimed.
Aside from ceasing the provision of power to the EC, PSALM was also advised by the Finance department to disconnect Lasureco from the Agus 1 hydroelectric power plant.
Magelco and Lasureco were also said to have racked up unremitted universal charges (UC) of P29 million and P9.5 million, respectively, which were collected from their consumers.
UCs are collected monthly by the grid operator and power distributors, and are remitted to PSALM.
Philstar.com reached out to PSALM for its comments on DOF's statement, which it earlier shared to reporters. The story will be updated with its answers.