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The Department of Energy (DOE) lauded the 10-year extension granted to the Power Sector Assets and Liabilities Management Corp. (PSALM), a move that will enable the state-run enterprise to fulfill its remaining obligations.
Energy Secretary Raphael P.M. Lotilla said in a statement that PSALM’s extension, formalized through Republic Act No. 12179, took effect last April 18.
“The enactment of RA 12179 ensures that PSALM can continue and complete its mandate to privatize its remaining assets,” he stated.
This extension of PSALM’s corporate life will also facilitate the much-needed rehabilitation of the Agus-Pulangi hydropower complex (APHC).
“The rehabilitation would restore at least 400 megawatts (MW) of renewable energy production and address any safety and flooding risks to nearby communities,” Lotilla explained.
The APHC comprises seven run-of-river hydropower facilities in Mindanao, boasting a total installed capacity of 1,000 MW. The rehabilitation efforts have been consistently pursued to address Mindanao’s power export capabilities to the Visayas and Luzon grids.
“The Agus-Pulangi rehabilitation was not achieved in the previous administration due to the absence of a viable counterparty given the end of PSALM’s corporate life in 2026,” he added.
Furthermore, the extension will provide PSALM with sufficient time to settle its financial obligations, preventing the transfer of some liabilities to the government before the coming year.
“Moreover, this will enable PSALM to secure more favorable borrowing terms and negotiate long-term, advantageous financing arrangements,” the DOE chief noted.
PSALM was established under the Electric Power Industry Reform Act (EPIRA) of 2001 to manage and eventually privatize government-owned power facilities, including the APHC.
Previously, Secretary Lotilla informed reporters that PSALM would likely need to assess the future of Mindanao’s first coal-fired power plant, the STEAG plant in Misamis Oriental. This plant could serve as the region’s backup power source while the APHC’s rehabilitation is underway.
Alternatively, the STEAG plant could be decommissioned to generate carbon credits, an option that would provide funding for further renewable energy development in the country.
