DOF wants NGCP to settle 13-B claim of TransCo

The Department of Finance (DOF) is fully backing the move of the Power Sector Assets and Liabilities Management Corporation (PSALM) to immediately call for the settlement of the R3.041-billion receivables of the National Transmission Corporation (TransCo) from its concession deal with the National Grid Corporation of the Philippines.

Finance Undersecretary Bayani H. Agabin said PSALM needs money to settle a portion of its outstanding obligations, so “it’s a priority that we collect NGCP’s dues with TransCo.” Agabin sits as the alternate for Finance Secretary Carlos G. Dominguez III both at the boards of PSALM and TransCo.

He stressed that any move for second round of pre-payment for the NGCP concession fees “would not be a good idea. Instead, we should go after the TransCo receivables for now.”

PSALM has sounded off that prior to enforcement of any adjustments in the table of concession payment schedules of NGCP, the TransCo receivables must be paid first in full.

PSALM officer-in-charge Lourdes S. Alzona said they already made corresponding briefing and recommendations to the Department of Energy (DOE) based on guidance set out by the Commission on Audit (COA) on its 2014 and 2015 audit reports.

“Our recommendation is to collect their outstanding obligations to TransCo, once we have that collected, we will have corresponding adjustments in the schedule of the NGCP concession fees,” she said.

The state audit body primarily prescribed that the NGCP must “pay its outstanding obligations with TransCo amounting to R3.041 billion.” It had been specified that the prepayment was not approved by the PSALM Board when it was consummated.

COA further noted that in any event that the concessionaire-firm fails to settle the specified amount, necessary adjustments shall be done by taking off the amount first from the R57.883 billion NGCP concession fees prepayment in 2013.

The COA-proposed scheme would be to “deduct first its obligations with TransCo amounting to R3.041 billion before crediting the balance to deferred concession fees.”

The specified TransCo receivables covered collections from power customers on connection and residual sub-transmission charges, primarily for calendar year 2007.

Another item represents collections of TransCo’s non-current power receivables that were taken out from the initial working capital (IWC) transferred to NGCP.

The customers which reported to have turned over such payments to NGCP include the Central Azucarera de Tarlac; National Irrigation Administration Region 2; NIA-MARIIS (Magat River Integrated Irrigation System – Cauayan District IV); Capiz Electric Cooperative, Inc. (CAPELCO); and NIA-MARIIS District III.

Fraction of the required NGCP payments to the government-owner of the transmission assets would be cost adjustments relating to the decision of the Energy Regulatory Commission (ERC) on its allowable revenues under its third regulatory reset, encompassing right of way (ROW) capital expenditures and sub-transmission asset divestments prior to the turnover of the facilities to the concessionaire.