PSALM incurs PhP15-billion losses in Mindanao

06 May 2012

Contrary to claims that the government has been generating profits from power sales in the Mindanao grid, the Power Sector Assets and Liabilities Management (PSALM) Corporation actually incurred accumulated losses amounting to PhP15 billion from 2001 to 2011 from the operations of its power facilities in Mindanao.

PSALM made this statement to ensure utmost transparency to all relevant sectors as to the actual financial position of the Mindanao plants' operations.

According to PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr., while operation of hydro plants results in operating profits, losses from coal, geothermal, and diesel-fired plants significantly exceed the revenues generated from the hydro plants. In fact, the cost of producing electricity from these facilities is more than the time-of-use rate imposed on Mindanao consumers.

Ledesma pointed out that the revenues generated from the hydro plants are being used to cover the operating losses from these facilities. PSALM sources electricity from these facilities to meet the demand of Mindanao consumers in view of the limited and intermittent supply from the hydro plants.

Ledesma further stated that another major consideration is the capital expenditures incurred for plant maintenance and rehabilitation. This has not been taken into account in the calculation of the plants' operating income.

Ledesma hopes this information will enlighten Mindanao consumers. The incurred P15-billion losses were assumed by PSALM and would be passed on to consumers through the Universal Charge upon approval by the Energy Regulatory Commission.

Strategic Communications and Partnership Division
Tel. No. (632) 9029067