Safety nets urged for power sector

The National Association of Electricity Consumers for Reforms Inc. (Nasecore) is calling for the inclusion of a number of safety nets in the final draft of the Power Reform Bill to ensure consumer protection and welfare.

Nasecore, one of the influential consumer groups in the energy sector, is batting for some measures on retail competition and open access.

Specifically, Nasecore believes that the threshold level should be reduced from two megawatts (MW) as specified in the bill to only one MW so that the benefits of consumer prices reach the household level soonest.

Nasecore president Pete Ilagan, in a letter to Rep. Julio Ledesma, chairman of the House committee on energy, said the implementation of retail competition and open access should not be dependent on the approval of unbundled transmission and distribution retail wheeling charges, and privatization of at least 70 percent of the total capacity of generating assets of Napocor and of the total capacity of the power plants under contract with Napocor in Luzon.

"These two conditions, if not met, will mean the delay of the implementation of the retail competition and open access," Ilagan said.

Ilagan argued that the Napocor should not be required to privatize its independent power producer (IPP) contracts since it does not own or operate these IPP plants.

The Nasecore official said the proposed caps in the market share of the generating companies should not be lifted until such time that sufficient competition has been achieved. "This will ensure a high level playing field for the industry players," he said.

He said the amount of electricity that an electric utility or distributor can buy from its affiliate generation company should be limited to only 20 percent of its capacity. "The absence of this limitation can weaken competition and lead to price manipulation that will endanger consumer welfare," he added.