PSALM hits Lasureco TRO

The Power Sector Assets and Liabilities Management Corp. (PSALM) said on Wednesday that a court decision that prohibited it from disconnecting an electric cooperative (EC) with unpaid dues amounting to nearly P13 billion was an “unjust move.”

According to the state firm, the Regional Trial Court of Lanao Del Sur issued last June 8 a Temporary Restraining Order (TRO) against PSALM’s disconnection notice to Lanao del Sur Electric Cooperative Inc. (Lasureco).

“The continuous supply of electricity to Lasureco without any indication on who will pay PSALM for such electricity is detrimental and extremely unfair to PSALM, to the Government, and to all other electricity consumers who are dutifully paying for their electricity,” PSALM said.

The disconnection of the electricity supply of Lasureco is due to its failure to pay its power bills.

Lasureco’s overdue account with PSALM continues to accumulate every month. As of April 30, the cooperative’s outstanding obligation to PSALM amounts P12.9 billion.

The cooperative continues to refuse to sign the Contract for Supply of Electric Energy (CSEE) with PSALM, in direct violation of PSALM’s policy that requires a duly executed CSEE to enable PSALM to supply electricity to any electric cooperative.

Lasureco previously entered into a CSEE with the National Power Corp., but this contract expired in December 2013 and was not renewed. PSALM has consistently maintained that in the absence of a CSEE, PSALM has no contractual obligation to supply Lasureco with its energy requirements.

The cooperative draws its power supply from PSALM because its power lines became directly connected to Agus 1 Hydroelectric Power Plant (HEPP). Based on records, PSALM did not consent or authorize Lasureco to be directly connected to the facilities of Agus 1 HEPP. This irregular and unauthorized connection allowed Lasureco to continue drawing electricity from PSALM even without paying PSALM.

PSALM said it has consistently communicated its concerns to Lasureco and has repeatedly demanded payment. In numerous letters to Lasureco, PSALM asked for Lasureco to immediately pay its outstanding obligations and to submit requirements to aid PSALM in the evaluation of its financial capacity to restructure such obligations and facilitate the execution of a CSEE. However, Lasureco failed to pay and submit any of the documentary requirements.

“It is not PSALM’s legal mandate to give out free electricity to Lasureco and neither does it receive any kind of budgetary allocation from the National Government to subsidize the grant of free electricity to ailing electric cooperatives,” said PSALM.

Upon the instruction of the Department of Finance, PSALM served a Notice of Disconnection and Final Demand to Lasureco last May 26 for its failure to settle its outstanding power account, advising the immediate settlement of the said amount within five business days from receipt of the notice.