WESM pushes RPS compliance fees

Manila Bulletin
By Myrna M. VelascoPublished: March 30, 2013



A key amendment in the rules for the country’s Renewable Portfolio Standard (RPS) is the fees to be collected in lieu of renewable energy credits that will be imposed upon energy suppliers.
The policy insertion on alternative compliance payment (ACP) was courtesy of the Philippine Electricity Market Corporation (PEMC), operator of the Wholesale Electricity Spot Market.
PEMC President Melinda L. Ocampo has explained that the ACP “will be the last resort to comply with the DOE’s approved RPS level.”
As embraced by other RE markets globally, ACP is the fee that energy suppliers will have to pay if they fail to secure the required level of renewable energy credits as prescribed in the RPS.
The WESM will have a key role in the goal to step up the development of RE capacities given that one of the ‘investment enticing tools’ being proposed would be the setting up of RE Market. The design and trading schemes for the propounded market are still being finalized.
The Department of Energy-designed rules set forth that the ‘mandated sectors’ may comply with the RPS via trading for renewable energy certificates (RECs) in the envisioned renewable energy market (REM).
The sectors mandated to comply with the RPS rules include all distribution utilities, licensed electricity suppliers, supplier of last resort (SOLR) upon the commencement of open access and retail competition; generating companies which are serving the directly-connected customers; and entities duly-authorized to operate within economic zones, among others.
According to National Renewable Energy Board (NREB) chairman Pete Maniego, the revised RPS rules will be submitted to Energy Secretary Carlos Jericho Petilla first week of April.
The DOE is the responsible agency in crafting the RPS rules. But when the task was tossed to newly appointed Energy Assistant Secretary Daniel Ariaso, he opted to engage the help of NREB in finalizing the form and in tightening all the provisions of the rules which shall govern the exponential rise of RE capacity in the power mix.
Upon its submission to the Secretary, the RPS rules may be further reviewed by his staff before he gets it signed and set ready for enforcement.
The preliminary draft of the RPS was presented for public consultation in November 2011. It took more than a year for the energy department though to hash out the details as well as in correcting the grammar and “excellently re-writing” the provisions of the rules.
The draft RPS rules prescribe an increase in the RE portfolio at a rate of 1.0-percent annually over 10-year period. And this will be subject to review by the DOE at least once every two years.

The proposed rules stipulated that “the annual increase should correspond to the targeted dispatchable incremental renewable energy supply established by (the) DOE in cooperation with the National Transmission Corporation or its successor-in-interest.” (MMV)  source