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Manila Bulletin devider Business devider DOF orders MAGELCO, LASURECO to pay P16 B

DOF orders MAGELCO, LASURECO to pay P16 B

Published Jun 8, 2022 03:18 pm

The Department of Finance (DOF) has ordered the collection of unpaid electricity bills of the Maguindanao Electric Cooperative, Inc. (MAGELCO) and Lanao del Sur Electric Cooperative, Inc. (LASURECO).

In a statement Wednesday, June 8, the DOF said MAGELCO and LASURECO have outstanding accounts amounting to P16 billion combined with the Power Sector Assets and Liabilities Management Corp. (PSALM).

For this reason, the DOF instructed PSALM to strictly enforce its credit and collection policy against MAGELCO and LASURECO.

According to the DOF, PSALM should not give free electricity to the two electric cooperatives, citing it is not the state-owned firm’s mandate to subsidize electricity costs, and it does not have the budget to do so.

The poor payment performance of MAGELCO and LASURECO has been a long standing problem, stemming from both cooperatives’ financial mismanagement and low collection efficiency from consumers, the DOF said.

As a consequence, MAGELCO and LASURECO are unable to fully pay their obligations, compelling PSALM to incur more borrowings to cover the ever-widening shortfall, the department added.

“PSALM has repeatedly demanded payment from MAGELCO and LASURECO, with the threat to curtail their energy allocation should they fail to settle in full their power bills and to limit their power allocation equivalent to their actual payments to PSALM,” DOF said.

To bring an end to the ballooning financial obligations, the DOF has ordered PSALM to commence the curtailment for MAGELCO and disconnection for LASURECO starting May 26, 2022.

In the case of MAGELCO, it only paid P45.5 Million out of the total power bill amounting to P147.2 Million for December 2021 to April 2022, according to the DOF.

As of 30 April 2022, MAGELCO has outstanding payables to the Government amounting to P3.8 billion.

On the other hand, LASURECO’s outstanding payables to PSALM amounted to P12.9 Billion as of 30 April 2022, representing outstanding power bills.

To date, LASURECO has not expressed intention to settle its outstanding accounts with PSALM.

As such, the DOF instructed PSALM to commence the disconnection of LASURECO from the Agus 1 Hydroelectric Power Plant.

In addition, DOF said MAGELCO and LASURECO have unremitted Universal Charges (UC) amounting to P29 million and P9.5 million, respectively, which they have already collected from electricity end users.

Related Tags

Power Sector Assets and Liabilities Management Corp. Maguindanao Electric Cooperative Lanao del Sur Electric Cooperative LASURECO DOF Inc. PSALM MAGELCO Department of Finance
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