BARMM eyes takeover of ailing power co-ops

BARMM Interim Chief Minister Ahod “Al Haj Murad” Ebrahim

COTABATO CITY—The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) is eyeing the creation of a new entity that will take over the operation of cash-strapped power distribution utilities in Lanao del Sur and Maguindanao provinces.

This was outlined by BARMM Interim Chief Minister Ahod “Al Haj Murad” Ebrahim in a letter to Energy Secretary Alfonso Cusi, Finance Secretary Carlos Dominguez III and Irene Joy Besido-Garcia, president and chief executive officer of Power Sector Assets and Liabilities Management Corp. (PSALM).

PSALM operates the Agus and Pulangi hydroelectric power plants that supply energy distributed by Lanao del Sur Electric Cooperative (Lasureco) and Maguindanao Electric Cooperative (Magelco) in their respective concession areas.

Earlier, PSALM asked the National Grid Corp. of the Philippines (NGCP), operator of the country’s power transmission network, to cut off Lasureco from the Agus complex on June 7, and reduce the volume of power supplied to Magelco on June 13, owing to their huge debts.

As of April 30, Lasureco owed PSALM P12.9 billion while Magelco had arrears of P3.8 billion. From December last year to April this year, Magelco’s power purchases from PSALM amounted to P147.2 million, or an average of P29.44 million a month, while Lasureco’s monthly bill was P47.4 million.

Appeal

Dominguez, who chairs PSALM, had said that the state-owned firm could not afford to bleed for the ailing electric cooperatives.

But Ebrahim asked that the planned measures against Lasureco and Magelco be put on hold.

“We earnestly appeal to PSALM to reconsider its requested action from NGCP as this may have a negative impact on the political, economic and social situations within the concession of Lasureco and Magelco, as well as in the Bangsamoro Autonomous Region,” he said.

He added that part of the search for long-term solutions to the financial problems of the distribution utilities is “the creation of a new distribution entity that will mirror the services being offered by Lasureco and Magelco.”

“This entity may be in place within the transition, or after the regular parliamentary elections in the BARMM in 2025,” Ebrahim said.

“A meeting with BARMM’s cabinet is being scheduled to discuss ways forward as this endeavor will entail a huge commitment from the Bangsamoro government, as well as substantial investment of its own financial and human resources,” he added.

Ebrahim revealed that the Department of Energy (DOE) earlier broached the idea of the BARMM either taking over or overseeing the operations of Lasureco and Magelco.

“We believe that this proposal should be carefully restudied, and the appropriate stakeholders are timely consulted, as the takeover of these legacy cooperatives, as well as the future plans and undertakings, therefore, should be jointly decided and pursued by the national government and the Bangsamoro government, without prejudice to the latter’s decision to create a new entity pursuant to Section 36, Article XIII of the BOL,” he said in his letter.

The Bangsamoro Organic Law (BOL), the BARMM’s charter, allows the regional government to build and operate power generation and distribution entities exclusively for electricity consumers in the region.

Reprieve

The BOL mandates that the regional government shall divest its interests in the operations of these distribution entities after 25 years.

Maguindanao Gov. Bai Mariam Mangudadatu has also appealed to PSALM to forego Magelco’s power supply reduction, vowing that the provincial government would help in the cooperative’s rehabilitation.

On Friday last week, Lasureco secured a 20-day reprieve from a court in Marawi City, halting its disconnection from the Agus 1 power plant. But it failed to post the P47-million cash bond on Monday as required by the court, which means the disconnection can proceed, said lawyer Faisal Cali of the Lanao del Sur provincial government.

According to Cali, the provincial government is in talks with PSALM to prevent the power cutoff.

The Department of Finance (DOF) had said that Lasureco and Magelco suffered from financial mismanagement and low collection efficiency.

Amid the looming power cutoff, Lasureco has stepped up its collection among member-consumers in the province, disconnecting those who have over one month in unpaid bills.

Of Magelco’s 47,000 member-consumers, only about 25,000 are regularly paying their bills, according to Maguindanao provincial administrator Cyrus Torreña. —WITH A REPORT FROM DIVINA M. SUSON

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