EPIRA revision extends Psalm

President Ferdinand R. Marcos Jr. has signed a law extending the corporate life of Power Sector Assets and Liabilities Management (Psalm) Corp. for another 10 years.

Psalm’s corporate life was extended through Republic Act (RA) 12179 inked by Marcos on April 18.

RA 12179 amends Section 50 of RA 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001 to continue Psalm Corporation’s operation, which is set to expire on 26 June next year under its original charter.

PSALM, which was established through the EPIRA, has the principal mandate of managing the orderly sale, disposition and privatization of the National Power Corp. generation assets, real estate and other disposable assets, and Independent Power Producer contracts aiming to liquidate all NPC financial obligations.

The Department of Energy welcomes the extension of Psalm’s life.

“The extension also provides PSALM with additional time to manage its outstanding financial obligations, thereby preventing the transfer of its remaining liabilities to the national government in 2026,” according to the DoE.

Favorable debt terms

Psalm’s fresh tenure will enable it to secure more favorable borrowing terms and negotiate long-term financing arrangements.

It would also allow the rehabilitation of the Agus-Pulangi hydropower complex in Mindanao. The rehabilitation would restore at least 400 megawatts (MW) of renewable energy production.

The Agus-Pulangi rehabilitation was not achieved in the previous administration due to the absence of a viable counterparty as investors were apprehensive over the impending end of Psalm’s corporate life.

The financial obligations include stranded debts and stranded contract costs, which were transferred to and assumed by PSALM, pursuant to the EPIRA.

“The PSALM Corp. shall continue to exist for a period of 10 years from the expiration of its original term on 26 June 2026. All assets held by it, all moneys and properties belonging to it, and all its liabilities outstanding upon the expiration of its term of existence shall revert to and be assumed by the National Government,” the new law read.