Executive branch to come up with proposals to power bill

The Executive branch of the government is expected to come up soon with its own recommendations on the proposed Electricity Industry Reform Act of 2001, newly appointed Energy Secretary Jose Isidro Camacho said the other day.

"We (Department of Energy) together with the National Economic Development Authority (NEDA), Department of Finance will consolidate our proposals into a position paper. We will pass it for approval to President Arroyo soon," Camacho said.

The final version of the paper, he said, would be presented to the bicameral conference committee of Congress.

According to Camacho, they expect the Power Act to be part of the agenda for the proposed special session of the 11th Congress to be conducted within this month.

"We expect to present our position to the bicam before the final version of the bill is passed," he said.

Camacho said they would bat for the reduction in threshold of household which can have access to direct connection or choice of supplier to one megawatt from the proposed 2 MW, lowering of the cap for cross-ownership, demand level for wholesale spot market during transition period, among others.

Meanwhile, the nationwide consultation of the Foundation for Economic Freedom concluded last Wednesday.

Several resolutions were formed to address the controversial issues, among which are open access, cross-ownership, stranded costs of distribution utilities, National Power Corp. (Napocor) stranded debts and contract cost recovery, creation of the Energy Regulatory Commission and promotion of consumer interest and privatization of the Agus-Pulanggi Hydro power plant.

The series of regional dialogues conducted by FEF aims to come up with a consensus among civic groups in the passage of the bill. FEF is a non-partisan organization committed to policy research and advocacy. It is composed of a former government officials and academicians who believe in market-based policies as a means of establishing good governance in the country.

On open access, the FEF calls for the threshold of 2 MW for Luzon and 1.25 MW for Visayas and Mindanao should be lowered to promote competition; in particular the Cebu dialogue resolved that the effectivity date for open access be the same for all areas and not be subject to conditionalities.

On cross-ownership, the consensus among civic groups is that there should be absolute prohibition on cross ownership between generation and distribution companies to prevent collusion; existing interest should be divested within a three year period to ensure a truly competitive environment that will attract new industry players.

On stranded costs of distribution utilities, civic groups said distribution should not be allowed recovery of their stranded costs.

As this developed, National Association of Electricity Consumers for Reforms Inc. (Nasecore) president Pete Ilagan said they would try to forge a strategic partnership with both local and foreign groups to enable them to buy some of the power plants to be privatized by the Napocor.

Ilagan said they are now studying this option so that they would be able to take equity in the companies that would eventually own the power plants of the state-owned power company.

"Our strength is our members. We should be able to come up with a way to empower them," he said.

According to him, they have already set up an aggregator company in Region 8 in preparation for the passage of the bill.