The Department of Energy (DOE) is batting for the corporate life extension of state-run Power Sector Assets and Liabilities Management Corporation (PSALM) so it can serve as counterparty to the investing-entity that will rehabilitate the Agus hydropower complex in Mindanao.

Energy Secretary Raphael P. M. Lotilla told reporters that PSALM is the best candidate as counterparty to any agreement for the rehabilitation of the Agus plant, but that will only be legally feasible if its existence will be stretched after its lapse by June 2026.

“What we want is for the corporate life of PSALM to be extended, because its corporate life will expire in 2026. To be able to be the counterparty for the rehabilitation of Agus, we need an entity and the best entity for that is PSALM,” he said.

The energy chief added “the moment that Congress extends its corporate life, then we can go into those options.”

Lotilla indicated the generation capacity of the hydro plant had already been massively de-rated to 600-megawatt scale, but that can still be ramped up with proposed repair and overhaul of the facility.

“One move for us is to rehabilitate the Agus power plant in Mindanao, so that we can restore the dependable capacity from the 600MW that we have right now to its original installed capacity of 1,000MW – so we have to regain the 400MW there,” he stressed.

Lotilla primarily qualified  “the moment that Congress extends its corporate life, then we can go into those options.”

He explained that in recent years, “one major obstacle for the rehab was that: we could not identify the counterparty agency that will take care of the agreement – whether its PPP (public-private partnership) or ODA (official development assistance), we need one agency to become the counterpart.”

The DOE secretary sounded off though that there is already high probability for a second lease on PSALM’s corporate life based on the flow of discussion happening between the legislative and executive branches of government.

“There’s now a consensus between the Senate and the House and the LEDAC (Legislative-Executive Development Advisory Council), which is chaired by the President, that EPIRA amendments will be among them,” he stated.

Lotilla expounded of the key revisions to be introduced in the Electric Power Industry Reform Act (EPIRA), one of the most important is the extension of PSALM’s corporate existence.

He said the length would depend “on the number of years that is needed because if we extend the life of PSALM, that means that the universal charge for stranded debt can also be extended over a longer period of time – so that will soften the impact on consumers.”