ERC urged to freeze FiT-All rate hike

By Lenie Lectura - June 4, 2018

https://businessmirror.com.ph/erc-urged-to-freeze-fit-all-rate-hike/

THE Laban Konsyumer Inc. (LKI) is urging the Energy Regulatory Commission (ERC) to halt the collection of additional feed-in-tariff allowance (FiT-All) of P0.0733 per kilowatt-hour (kWh).

In its-six page motion for reconsideration filed on Monday, the group wants the ERC “to issue a resolution setting aside” its decision on FiT-All rates “for being null and void on the ground of lack of jurisdiction,” and “to suspend and/or stop immediately the collection of the FiT-All.”

The ERC raised the FiT-All rates to 25.63 cents per kWh, higher than the current FiT-All rate of 18.30 cents per kWh. It is also higher than the 22.91 cents per kWh rate applied by the National Transmission Corp. (Transco), administrator of the FiT-All fund. 

The decision was dated February 27, 2018, but docketed on May 11, 2018. It is supposed to take effect this June billing.

FiT-All is billed to all on-grid electricity consumers, which appears as a separate line item in power distributors’ bills. The amount is meant to cover payments to renewable-energy (RE) developers who are assured of a fixed rate per kWh for electricity generated by their projects over a period of 20 years.

“Aside from being void ab initio and without legal effect, the assailed decision must be reconsidered because it granted a higher FiT-All rate of P0.2563 per kWh despite TransCo’s prayer for the approval of a FiT-All rate of P0.2291 per kWh, which is an act of grave abuse of discretion tantamount to lack or excess of jurisdiction on the part of this honorable commission,” LKI  President Victorio Mario Dimagiba said.

LKI said it is not arguing that the FiT-All rate should be disregarded, “only that it be determined in a certain manner—a manner that upholds and respects the constitutional right to due process of every electricity-consuming public in this country.”

“What LKI finds erroneous is the manner by which this honorable commission disregarded its own pronouncements of protecting the consumers from rate applications that fail to comply with due process requirements, and then, itself violating the said due process requirements that it espoused when it issued the assailed decision,” LKI’s motion stated.

Dimagiba expressed concern over the decision and reiterated his group’s prior petitions to revert the FiT-All, and reminded the ERC of its mandate to protect consumer welfare, while also demanding that the “ERC should not be ruling on any further rate increases in FiT-All, and the commission should render null and void its decision in the application for an increase in FiT-All. Because of this increase, consumers will have to brace for an increase in their electricity bills starting June, and this will only add to their already ongoing suffering from TRAIN [Tax Reform for Acceleration and Inclusion law].”

LKI voiced out its concern for Filipino consumers, saying that “consumers are already overburdened with rising fuel costs, as well as the rise of prices of rice, noodles and other basic commodities.”

“Though sometimes we are welcomed by news, such as lower electricity rates this month of May as announced by Meralco, looking at the bigger picture, prices of most products, goods and services have been skyrocketing, especially with the implementation of the TRAIN law,” the group added.

Dimagiba reiterated that the government should consider shouldering the FiT-All cost instead of passing it on to the public.

The commission had said there is a need to raise the FiT-All rate to address the inability of the FiT-All fund to pay in full the claims of FiT-eligible generators. 

“While the commission is granting a rate of P0.2563 per kWh, considering that there is an existing rate of P0.1830 per kWh, what is being added is only an increment of P0.0733, which represents the increase from the current FiT-All rate. The approved FiT-All rate is sufficient to cover the obligations,” it said.

As of February 5 this year, the total RE claim stood at P40.120 billion, of which only 82 percent has been paid, and 18 percent of P7.378 billion remains unpaid. Accrued interest has ballooned to P527 million. This is 195 percent higher than the January 2016 interest level, when the commission approved the 18.30 cents kWh FiT-All 2016 rate.

“The condition has exacerbated to the detriment of the consumers since interest is also charged in the FiT-All fund, thus, based on that and the fact that there is again an alternative prayer in this application, the commission believes that the grant of the adjustment is justified,” it said.

The newly approved rate represents the FiT-All rate for 2017. Transco has a separate application for a FiT-All rate for 2018 which is pending before the ERC.