Power distributor Manila Electric Co. is supporting a proposed bidding to determine the electricity rates from renewable energy projects, despite the opposition by renewable energy investors.
“We support the proposal to employ competitive bidding process in the implementation of the FIT [feed-in tariff] system,” Meralco said in a comment submitted to the Energy Regulatory Commission.
Renewable energy developers rejected the proposal of Senator Sergio Osmeña to bid out the pricing of renewable energy projects, which they said was in violation of the Renewable Energy Law. The proposal would also discourage local and foreign investors, they added.
Meralco said the rates that would be approved by the ERC might serve as caps or the maximum tariff that should be offered by the renewable energy developers.
“The competitive bidding process can be a mechanism to optimize the FIT-allowance that will be charged to the end-users. It will also be transparent criteria for the selection of projects that may avail of the FIT,” the company said.
“At the same time, it can also serve as a mechanism to maximize the installation targets, since lower bid rates would mean more allowance to accommodate more renewable energy capacity for the same FIT-allowance,” it said.
Meralco, however said, the proposal of a competitive bidding for the renewable energy rates should be implemented in the next batch of the installation targets “as it will take more time to thresh out the mechanics of the bidding process.”
Meralco also agreed with proposals to revisit the feed-in tariff rules especially regarding the issue of intra-grid and inter-grid cross subsidies.
“We urge caution on the additional burden on consumers’ electricity bills that the implementation of the FIT system will bring. We firmly believe that any additional imposition, just like any other cost throughout the power supply chain (e.g., (distribution, transmission, ancillary charges, taxes, etc.), 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,” it said.
(Published in the Manila Standard Today newspaper on /2012/May/07) source
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