State-run Power Sector Assets and Liabilities Management Corp. (PSALM) said it incurred losses of up to P15 billion between 2001 and 2011 from its operation of the government’s power facilities in Mindanao.
PSALM revealed the figures on Sunday to counter allegations that the government has been raking in profits from electricity sales in Mindanao, as well as to ensure “utmost transparency to all relevant sectors as to the actual financial position of the Mindanao plants operations.”
The P15 billion, however, could be recovered as it will be passed on to consumers through the universal charges for stranded contract costs and stranded debts on their electric bills.
This amount is already included in the P140 billion worth of debts that PSALM had earlier sought to collect.
It will be recalled that last year, PSALM filed an application in the Energy Regulatory Commission (ERC) to recover from consumers 36 centavos per kilowatt-hour within a four-year period to cover the stranded contract costs and another 3 centavos per kWh within a 15-year period to settle stranded debts.
These would be reflected as universal charges in the monthly bill of consumers.
The petition remains pending in the ERC.
Losses in other plants
PSALM president and chief executive officer Emmanuel R. Ledesma Jr. explained in a statement that while the operation of hydropower plants, specifically the 646-megawatt Agus and Pulangi facilities, resulted in operating profits, the government had been incurring losses in the operations of its coal, geothermal and diesel-fired plants.
These losses significantly exceed the revenues generated by the hydro plants, he said.
“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 said the revenue generated by the hydro plants went to cover the operating losses of the facilities.
Capital expenditures
He said another major consideration was the capital expenditures incurred for plant maintenance and rehabilitation. This has not been taken into account in the calculation of the plants’ operating income.
PSALM currently sources additional capacity from these facilities to meet the demand of Mindanao consumers in view of the limited and intermittent power supply from the hydro plants.
At present, the government still owns power plants, including the Agus and Pulangi facilities, a 32-MW diesel-fired power barge in Davao, and manages as well contracted capacities of several power facilities in Mindanao including Southern Philippines Power Corp.’s 55-MW bunker-C fired power station in Sarangani, and Western Mindanao Power Corp.’s 100-MW diesel-fired generating facility in Zamboanga City, the 108.5-MW Mt. Apo geothermal facility and the 210-MW Mindanao coal power plant in Misamis Oriental. source
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