Darkness looms for 2.6 million in Lanao del Sur, Maguindanao

ILIGAN CITY––Some 2.6 million people in Lanao del Sur and Maguindanao provinces would be cut off from electricity supply service if the cooperatives there would not agree to settle their debts with a state-owned firm desperate to plug financial leaks.

This prospect of darkness has leaders of both provinces scrambling Thursday for solutions.

The Power Sector Assets and Liabilities Management Corporation (PSALM), chaired by Finance Secretary Carlos Dominguez, had informed the ailing Lanao del Sur Electric Cooperative (Lasureco) and Maguindanao Electric Cooperative (Magelco) to settle their unpaid obligations or face the consequences.

PSALM was created through the Electric Power Industry Reform Act to privatize the National Power Corporation assets. Meantime, it sells the power produced by the Agus and Pulangi hydroelectric generation plants.

As of April 30, Lasureco has unpaid power purchases amounting to P12.9 billion and P3.8 billion for Magelco. Both get their entire power supply needs from PSALM.

A news release from the Department of Finance (DOF) said Wednesday that PSALM had ordered on May 26 the disconnection of Lasureco and the curtailment of power supply to Magelco.

PSALM has asked the National Grid Corporation of the Philippines (NGCP), which operates the country’s power transmission network, to implement the changes.

On June 1, NGCP district manager Linley Dajao wrote to Lasureco general manager Nordjiana Dipatuan-Ducol that the power transmission company would disconnect the electric cooperative from the grid if it failed to settle by 9 a.m. on June 8, its obligation with PSALM.

On May 31, Ma. Cynthia Manrique, Vice President and Head of the NGCP Revenue and Regulatory Affairs, served a “Notice of Suspension of Service” to Lasureco, per request of PSALM.

But the cash-strapped Lasureco obtained a three-day reprieve beginning June 7 from the Marawi City regional trial court that ordered PSALM and NGCP to refrain from implementing the disconnection.

Lasureco reportedly posted a P700,000 bond before the court on June 6 in connection with its prayer for reprieve.

The temporary restraining order issued by executive judge Wenida Papandayan expires Friday.

On Thursday, Maguindanao Gov. Bai Mariam Sangki-Mangudadatu asked for a restructuring of Magelco’s debts to prevent load curtailment beginning at noon on June 13.

Magelco gets 24 megawatts of electricity from PSALM. It was not known how much of this would be shed off.

But the DOF said it prefers to provide power supply to both Lasureco and Magelco “equivalent to their actual payments to PSALM.”

The DOF said that because of the two electric cooperatives’ inability to pay their obligations fully, PSALM is forced “to incur more borrowings to cover the ever-widening shortfall” in its collected revenues.

In addition to unsettled power bills, Magelco and Lasureco had not remitted universal charges amounting to P29 million and P9.5 million, respectively, which they had already collected from electricity consumers, the DOF said.

“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.

Of Magelco’s 47,000 member consumers, only about 25,000 are paying their bills, according to lawyer Cyrus Torreña of Mangudadatu’s office.

Torreña said Mangudadatu had recognized the need for a revamp of Magelco, alongside the restructuring of Magelco’s liabilities with PSALM.

But Torreña said they were not inclined to seek a reprieve from the court, preferring “to come up with a win-win solution.”

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