OK of debt plan keeps power on in Olongapo
A state-run firm managing the supply of electricity from the government’s remaining power generators has agreed to restructure nearly P5 billion in debts owed by Olongapo City, effectively postponing plans to cut off power from the entire city.
Emmanuel Ledesma Jr., president and chief executive officer of the Power Sector Assets and Liabilities Management Corp. (Psalm), said the city government made an initial payment of P500 million. The rest of the city’s debts will be subject to a long-term restructuring plan that has yet to be finalized.
Ledesma also said the city agreed to pay P90 million in bills in two months.
On July 2, city officials met with Psalm representatives and Energy Secretary Jericho Petilla to discuss the payment scheme acceptable to Psalm to avert the disconnection of the city from its power supply.
Olongapo City Mayor-elect Rolen Paulino was earlier quoted as saying the debt restructuring plan would be different from that signed by outgoing Mayor James Gordon Jr. with Psalm.
Systems loss and interests from unpaid bills are said to be the reasons for the city’s power debts to balloon. Industry observers said such a situation happens in many other areas for various reasons—from nonremittance and fund mismanagement to simple lack of funds.
Psalm had given the city government until June 25 to pay up or be disconnected from its power supply.
The city government had tried to pay off part of its debts using proceeds from the sale of its Public Utility Department to the Olongapo City Electricity Distribution Co. Inc. (OEDC) for P610 million.
OEDC received a 25-year franchise from the national government to supply power to Olongapo City.
“[Psalm and Petilla] agreed to our appeal [to stop the power disconnection],” Paulino said in a text message to the Inquirer.
Paulino, however, did not respond when asked about the details of the agreement.
But an Inquirer source who knew about the discussion between Psalm and the city government said the disconnection was put on hold because the parties “agreed to review the numbers and come up with a long-term payment plan.”
The Inquirer earlier reported that, for this year alone, PSALM is raising P60 billion to fund maturing loans and other requirements. With a report by Robert Gonzaga, Inquirer Central Luzon
