DOE objects to PSALM’s president-in-waiting

By Myrna M. Velasco – April 20, 2018, 10:00 PM
from Manila Bulletin

The choice of the Department of Finance (DOF) for a prospective president of state-run Power Sector Assets and Liabilities Management Corporation (PSALM) reportedly gained objection from the Department of Energy (DOE), hence, no appointment had been made until now.

Energy official-sources previously tipped off the targeted posting of lawyer Irene Joy Besido-Garcia for PSALM’s top post, being then the preference of the finance department, but turn of events apparently did not run in her favor.

“Her appointment was objected to by the DOE,” a highly placed source said. With that, the company has to pursue its asset privatization initiatives and liability management undertakings for now under Officer-in-Charge Arnold Francisco.

Industry sources similarly hinted that the company’s president-in-waiting is not as keen anymore on the post, as she has been giving remarks that her prospective salary at PSALM, “cannot even buy me shoes.”

It is not known who is the preferred candidate of the DOE or that of Energy Secretary Alfonso G. Cusi at this point. The last one that was seriously considered for the position was former Solicitor General Agnes T. Devanadera, now chairman of the Energy Regulatory Commission.

PSALM still has more than R500 billion worth of power sector debts and liabilities that it will need to dispose of, with no clear signs yet that this can really be wiped out totally before the end of its corporate life in 2026.

Without remedial measures that may be pursued by the company, that scale of liabilities will have to be shouldered by the Filipino consumers – over a stretch of 9-10 years at a universal charge (UC) rate of R0.35 per kilowatt hour (kWh), that was as of the last calculation.

The UC components in the bill partly account for the stranded debts and stranded contract costs of PSALM, which is a charge passed on to all consumers.

The state-run company’s liabilities could only be eased or brought down if it can maximize proceeds from the remaining sale of National Power Corporation (NPC) assets, but until now, its targets on this sphere have not been moving as expected.

The other measure dangled to trim PSALM”s UC pass-on cost to consumers would be to utilize fraction of the Malampaya fund to write off the remaining debts of NPC.

Until now, however, the government cannot set a definitive track and timeframe yet on that proposed rate reduction due to legal and policymaking hurdles.