Universal levy eyed to cover Napocor’s stranded costs

Newly-installed Energy Secretary Jose Isidro "Lito" Camacho will push for the imposition of a universal levy to cover the stranded costs of the National Power Corp. (Napocor).

Camacho is proposing that the universal levy be incorporated in the Electric Power Industry Reform Act which is pending in Congress.

"We should recognize that Napocor has operational losses which we have to recognize. How those losses will be paid? I think the fairest way to do it is to pass it on to consumers," Camacho said in a press conference.

On the cross-ownership issue, he said there is room for adjustment. Under the proposed version of the bicameral committee, starting not later than five years from the approval of the act until such time that the Energy. Regulatory Commission (ERC) has reduced the threshold level to 100 kilowatts (kW), no company or related group can own or control more than 40 percent of the installed generating capacity of a grid and/or 30 percent of the national installed capacity.

He said they are open to a proposal to reduce the level by at least five percent. He said they would look into the proposal of the Manila Electric Co. (Meralco) to lower the cap on cross-ownership to 25 percent and 30 percent, respectively.

"This (putting a cap on market share) will encourage new players (to come in)," he said, adding that this particular provision of the proposed bill is a "useful concept."

But, Camacho said he does not want to put numbers since these are all preliminary ideas and subject to finetuning. All these proposals will be presented in a Cabinet meeting today.

The new energy chief supports the idea of setting up a wholesale spot market. "A concept of having a component of supply to be taken from wholesale spot market at least for the time being when we are in transition period, is good. We will achieve free market in this concept," he said.