Power generation companies (GenCos) and distribution utilities (DUs) are asking the government for fiscal assistance to prevent the collapse of operations and bankruptcies as their cash collections have been paused due to the lockdown in the country.
“Our industry players need financial assistance. I have discussed this with our Department of Finance (DOF) Secretary and we are depending on the bankability of the generation companies, distribution companies, the transmission company to help extend credit to our consumers,” Department of Energy Secretary Alfonso Cusi was quoted in a report.
The Philippine Electric Plant Owners Association (PEPOA) President Atty. Ranulfo Ocampo told lawmakers to provide fiscal aid of “interest-free loans to distribution utilities to bridge finance their capital requirements.”
“The interest free loans be payable in 12 equal monthly installments starting January 2021 so we can have breathing room at least for the consumers and the distribution sector as we return to the new normal period after COVID-19,” he added.
The Philippine Independent Power Producers Association, Inc. (PIPPA) president and executive director Atty. Anne Estorco Montelibano said that the industry is faced with a challenge to financially survive, given that their collections have been deferred and yet they are required to continue their operations as well as pay their fuel suppliers and lenders.
“In the long run, extended payment flexibilities will take a toll on their operations,” Montelibano said, and “the alternative may be to close shop or to cease investing in new power plants,” Montelibano noted.
“There was no pause on the generation companies’ fixed costs in the form of debts, bank loans, insurance, labor, maintenance, fuel taxes and the like,” she added.
Despite the challenges, Montelibano said that the power generators are still trying to make ends meet to comply and support the power industry.
“We are complying with the extension of payment and the four-month installment mandated by the ERC (Energy Regulatory Commission) and DOE (Department of Energy)… we have experienced difficulty in our own suppliers and creditors, where some, naturally affected by pandemic, are unwilling to extend payment flexibilities,” she added.