Effective January: New electric bill for renewable energy

Effective January: New electric bill for renewable energy
Consumers will pay an additional P0.406/kWh in electricity rates, representing the feed-in tariff allowance as mandated by the Renewable Energy Act of 2008

MANILA, Philippines – Despite a pending petition before the Supreme Court (SC), the Energy Regulatory Commission (ERC) released on January 1 its provisional approval of the feed-in tariff allowance (FIT-All) billing for all on-grid electricity consumers.   

Thus, consumers will pay starting this month an additional P0.406 ($0.0091*) per kilowatt hour (kWh) in electricity rates, ERC said in its 27-page decision released January 1.

The rate will be collected from electricity end-users, reflected as a separate item in their electricity bills, as mandated by the Renewable Energy Act of 2008 (RA 9513).

The FIT-All is set as an incentive for renewable energy (RE) developments such as those on wind, run-of-river hydro, solar, and biomass facilities.

In October 2014, ERC issued an order provisionally approving the application of the National Transmission Corporation (TransCo) to collect FIT-All payments.

Wind power developers are entitled to FIT rate of P8.53 ($0.19) per kWh; solar for P9.68 ($0.22) per kWh; hydro at P5.90 ($0.13) per kwh; and biomass at P6.63 ($0.15) per kWh.

The collection will be placed in a fund to be administered by TransCo in a bid to “resolve the issue that public fund[s] should be handled by [a] public entity,” ERC said.

ERC said the public funds will be managed by a government-owned and -controlled company and not by the private, Sy-controlled National Grid Corporation of the Philippines (NGCP).

Violating consumer rights

In a petition filed on December 19, 2014 before the High Court, petitioner and lawyer Remigio Michael “Mike” Ancheta argued that the additional line item in the consumers’ electric bills violates the Constitution and must be nullified.

Ancheta added that the manner it will be collected violates consumer rights, because it bills consumers for power that has yet to be generated and consumed.

The “erroneous” “advance collection” amounts to around P2.7 billion ($60.27 million*) or P230 million ($5.13 million) monthly for 2015, Ancheta said.

A Manila Electric Company (Meralco) residential customer consuming 200 kWh a month would be charged an additional P8.12 ($0.18)* monthly, Ancheta added.

While the RA 9513 is “laudable,” Ancheta said it does not call for advance billing.

The FIT shall be paid only for “electricity produced,” which means its production is not “at a future time,” Ancheta said, citing Section 7(e) of the RE Law and Section 5(c)(3) of the RE Law implementing rules and regulations.

FIT benefits

But industry experts argued that while FIT does spell out an extra few centavos in additional power rates, it, nonetheless, encourages more renewable energy plants to be built.

Renewable energy plants help temper prices in the WESM (Wholesale Electricity Spot Market) RE prices are not affected by market volatility.

The Department of Energy (DOE) said 2014 was a banner year for RE with the commissioning of large-scale power plants throughout the country for solar (22 megawatt [MW] San Carlos Solar Power Project in Negros) and wind power plants (in Ilocos Norte: 33MW Northwind Power Project; 150MW Burgos Wind Power Project; and 81MW Caparispisan Wind Power Project; and 54MW San Lorenzo Wind Power Project in Guimaras).

To date, total installed capacity of RE on-grid stood at 5,396.82MW.

DOE also awarded a total of 638 RE projects with a total potential capacity of 10,068.031MW. – Rappler.com

$1 = P44.80

Electric meter image via Shutterstock

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