The Department of Finance (DOF) has instructed the Power Sector Assets and Liabilities Management Corp. (PSALM) to strictly enforce its credit and collection policy against Maguindanao Electric Cooperative Inc. (Magelco) and Lanao del Sur Electric Cooperative Inc. (Lasureco) for their failure to settle their outstanding accounts of more than P16 billion combined and to pay their current power bills on time.
“To bring an end to the ballooning financial obligations of MAGELCO and LASURECO, the DOF has ordered PSALM to commence the curtailment for MAGELCO and disconnection for LASURECO starting May 26, 2022,” the agency said in a statement.
“PSALM should not give free electricity to MAGELCO and LASURECO because it is not PSALM’s mandate to subsidize electricity costs, and PSALM does not have the budget to do so,” the DOF said.
According to the DOF, Magelco and Lasureco’s poor payment performance has been a long-standing problem, stemming from both cooperatives’ financial mismanagement and low collection efficiency from consumers.
“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,” it said.
“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,” the DOF added.
