Manila Electric Co., the country’s biggest power distributor, has cautioned the government regarding the imposition of the feed-in-tariff allowance (FIT-ALL) on consumers as this might have a significant impact on electricity bills.
In a commentary sent by Meralco to the Energy Regulatory Commission, the distribution utility pointed out, in particular, the proposed guidelines for the collection and administration of the FIT-ALL, a universal levy to be collected from all power consumers. The FIT-ALL approximates the total payments required to be made to all renewable energy developers that will be entitled to the feed-in-tariff rates.
However, apart from the FIT-ALL itself, consumers will also have to pay for the administrative costs that will be incurred by the fund administrator—or the entity that will be tasked to handle all the remitted FIT-ALL by the distribution utilities and electric cooperatives. Thus, a prudent system must be in place to ensure that consumers will not be burdened further.
“We recommend that the rate recovery mechanism be simple and easy to implement, will not require over- and underrecovery adjustments, will be revenue neutral to the distribution utilities or electric cooperatives and will not have a significant impact to the generation charge of the consumers,” said Lawrence S. Fernandez, assistant vice president and head of utility economics of Meralco.
“We firmly believe that any additional imposition, just like any other cost throughout the power supply chain (for example, distribution, transmission, ancillary charges and taxes), should be carefully and continuously scrutinized against the objective of providing adequate, reliable, efficient and cost-effective electric service to all end-users, households and business alike,” he added.
Meralco, according to Fernandez, was also seeking the immediate resolution of the assignment of the fund administrator, which will have a major role in the implementation of the feed-in-tariff system.
The National Renewable Energy Board (NREB) has formally endorsed the state-run National Transmission Corp. (Transco) to become the administrator of the charges that will be collected from all power consumers for the use of renewable energy.
NREB Chairman Pedro Maniego Jr. earlier said that the letter dated September 11 reiterated their position that Transco should be the administrator of the FIT-ALL in compliance with the request of the Energy Regulatory Commission to confirm in writing such proposal.—Amy R. Remo source
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