PSALM’s 10-year extension lapses into law

MANILA, Philippines — A measure extending the corporate term of the Power Sector Assets and Liabilities Management Corp. (PSALM), the state-run firm that implements the privatization plan for the government’s energy assets, has lapsed into law.

Republic Act 12179, which amended the Electric Power Industry Reform Act of 2001 (EPIRA), lapsed into law without President Marcos’ signature last April 18.

Under the 1987 Constitution, the President has 30 days to sign a bill into law or to veto it. If the Chief Executive does not act on the measure within 30 days, the measure is considered enacted. A copy of the measure was published in a national broadsheet yesterday.

The new law states that PSALM shall continue to exist for 10 years from the expiration of its original term on June 26, 2026. All assets held by the state-run firm, 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 law also bars PSALM from collecting or charging consumers for stranded costs and stranded debts during its extended corporate life except as otherwise approved by the Energy Regulatory Commission prior to the date of its passage.

PSALM is mandated to manage the orderly sale, disposition and privatization of the National Power Corp.’s generation assets, real estate and other disposable assets and independent power producer contracts. It seeks to liquidate all the financial obligations and stranded contract costs of Napocor in an optimal manner.

The EPIRA was signed by former president Gloria Macapagal-Arroyo on June 8, 2001 as part of efforts to reduce electricity costs and promote competition in the power sector.