PSALM logs P27.14-B receivables from Ilijan plant

Published June 28, 2022, 2:59 PM

by Myrna M. Velasco

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has P27.140 billion receivables from South Premiere Power Corporation (SPPC), a company under San Miguel group that served as independent power producer administrator (IPPA) of the 1,200-megawatt Ilijan gas-fired power plant.

In the audited financial statement of PSALM as of end-December 2021, it was stipulated that of the accounts receivable-generation payments from SPPC, “P24.913 billion is already past due.” The accounts receivable from SPPC had escalated by more than P5.0 billion last year from P21.871 billion in 2020.

The government-run company, nevertheless, qualified that “the overdue amount arose from disputed items and differences in the interpretation of certain provisions of the IPP Administration Agreement.”

SPPC and PSALM have filed lawsuits in the Courts to resolve the dispute on the receivables being pursued by the state-run company due to differing treatment of the formula on how the IPPA payments on the Ilijan plant shall be calculated.

PSALM expounded that its generation payment-receivables from SPPC amounted to P4.622 billion from June 26, 2010 to December 25, 2012; then the bulk of P14.531 billion accrued from December 26, 2012 to December 31, 2021; plus value added taxes (VAT) of P5.515 billion.

The resolution of the PSALM-SPPC dispute is among the major concerns being sorted by the parties relative to the targeted turnover of the Ilijan plant to its IPPA at the lapse of the facility’s build-operate-transfer (BOT) contract this year.

Given the scale of its generation capacity, the Ilijan plant is a very critical asset needed by the biggest power grid of Luzon, so consumers can be spared from power interruptions especially during the high demand-months of summer.

The Ilijan plant’s gas supply and purchase agreement (GSPA) with the Malampaya gas field also expired this year, so the generating facility is one of the assets being lined up for fuel shift to liquefied natural gas (LNG) which will be made available in the country within this year.

Apart from SPPC, the government-run firm likewise listed additional P4.183 billion worth of receivables from other power generation companies and industrial customers. Its total accounts receivables as of end-December 2021 summed up to P31.323 billion.

The collections being pursued by PSALM include those of Good Friends Hydro Resources Corporation for P1.064 billion; Vivant Sta Clara Northern Renewables Gen. Corp. for P1.050 billion; FDC Misamis Power Corp. for P1.027 billion; Therma Luzon Inc. for P555.492 million; Strategic Power Development Corp. for P205.457 million; San Miguel Energy Corp. for P194.333 million; Waterfront Mactan Casino Hotel Inc. for P84.917 million; Vivant Energy Corporation for P1.066 million; and Unified Leyte Geothermal Energy Inc. for P0.68 million.

PSALM stated that some of these pending collections are also subjects of dispute resolution with the concerned customer-generation companies.