Napocor readies FIT rates for Spug areas

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TUESDAY, 13 SEPTEMBER 2011 20:44 PAUL ANTHONY A. ISLA / REPORTER

STATE-RUN National Power Corp. (Napocor) is preparing the final draft of recommendations that will determine the feed-in tariff (FIT) rates on renewable-energy (RE) projects among areas serviced by the Small Power Utilities Group (Spug), Napocor President Froilan Tampinco told reporters on Tuesday.

The deadline set for the completion of the new set of recommendations, according Tampinco, has been set this coming November. After Napocor is done with the final draft, the new set of recommendations will be submitted to the Energy Regulatory Commission (ERC), he added.

Tampinco said they have also included the National Electrification Administration (NEA) to be part of the discussions since they likewise render service to electric cooperatives.

“What’s crucial [here is that] there are existing tariffs today, particularly the universal charge for missionary electrification [UCME], which is used to fund or subsidize our new power providers,” Tampinco said, pointing out that Napocor is yet to determine where to source the subsidy for FIT.

“It cannot be another subsidy on our part. When an RE developer puts up a power plant that will replace the existing capacity with a certain subsidy, it will substitute that subsidy and will no longer be a new subsidy, in effect,” he said.

However, Tampinco said that  if an RE developer will put up a power plant to augment the existing capacity, then that will require a new subsidy. “We will only consider RE proponents whose generation cost would translate into a net reduction in the existing subsidy. If not, then we will not encourage it since Spug areas are highly subsidized,” he said.

The National Renewable Energy Board (NREB) has also approved a total of 830 megawatts (MW) in installation targets of RE to be developed. Of the 830 MW, according to NREB, 250 MW will be from hydropower projects, another 250 MW from biomass power projects, 220 MW from wind, and 100 MW and 10 MW from solar and ocean technologies.