PSALM extension pushed

October 15, 2021 Jester P. Manalastas 169 views

A House leader appealed for the extension of the corporate life of the Power Sector Assets and Liabilities Management Corp. (PSALM).“ House Committee on Energy chair and Pampanga Representative Juan Miguel Arroyo said this is to avoid “serious fiscal consequences” for the government.

Arroyo has filed House Bill 10006 seeking to extend PSALM’s corporate life for 50 more years beyond June 26, 2026, its original expiration date.

According to Arroyo, if PSALM’s life is not renewed, the government would be forced to shoulder P198 billion in debt from PSALM’s liabilities until 2026.

He urged the government not to wait until the next administration to extend PSALM’s corporate life.

PSALM was established through Republic Act 9137 or the Electric Power Industry Reform Act (EPIRA) in 2001 and given a 25-year corporate life.

It then assumed the assets and liabilities of debt-ridden National Power Corp. toward the privatization of Napocor’s various properties.

It sold the 650-megawatt Malaya Thermal Power Plant in Pililla, Rizal and Isla de Provisor, the site of the old Manila Thermal Power Plant in Paco, Manila.

The remaining five years of PSALM’s corporate life may not be enough to complete the framework for the NG’s plans for its assets.

He also said there are still remaining power assets and real-property assets that need to be privatized by PSALM, and that the extension of its corporate life would allow more time for it to complete the privatization of its remaining power plants and independent power producer contracts.

PSALM has yet to dispose of 33 percent, corresponding to 809 lots equivalent to 9.8 million square meters.

There are remaining financial obligations from Napocor beyond June 2026 that PSALM should liquidate.

Moreover, the P208-billion Murang Kuryente Act fund allocation may not be given to PSALM in the next three years due to limitations in fiscal space, and that there are pending cases involving IPPAS that remain in courts.