Higher power rates loom in April

By: Riza T. Olchondra 12:16 AM March 28th, 2016
http://business.inquirer.net/208955/higher-power-rates-loom-in-april

CONSUMERS may have to pay slightly higher power bills next month as distribution utilities such as Manila Electric Co. (Meralco) start collecting new Feed-in-Tariff (FIT) charges.

Regulators recently approved higher FIT-Allowance (FIT-All) charges of 12.40 centavos a kilowatt-hour (kWh) for 2016. The current rate (implemented since February 2015) is 4 centavos a kWh. The higher FIT-Allowance (FIT-All) will result in an additional P16.80 in the monthly bill of a typical Meralco consumer using 200 kWh, officials of the power retailer said. That is, if all other bill components such as the generation, transmission and distribution charges as well as related taxes remain the same.

The FIT-All is a uniform charge billed on all on-grid consumers who are supplied with electricity through the distribution or transmission network. The charge goes to a fund managed by National Transmission Corp. (Transco) to pay guaranteed rates to renewable energy (RE) developers under the FIT scheme. Transco formally advised collecting agents such as Meralco last month of the anticipated FIT-All increase. Thus, the higher FIT-All would be reflected in the April bills of customers, Meralco said.

The next batch of monthly FIT-All payments from power consumers will be used to pay renewable energy projects amounting to P6.92 billion, of which the bulk will be going to wind projects, P2.79 billion; solar, P2.59 billion; biomass, P1.26 billion, and hydro, P282.52 million.

The regulatory body assessed the list of existing FIT-qualified projects as well as pending applications that are likely to have met the requirements for eligibility before the March 15 deadline for the second batch of solar FIT.

The ERC-approved FIT rates are P6.63 a kWh for biomass, P5.90 for hydro, P8.53 for first phase and P7.40 for second phase of wind, and P9.68 for first phase and P8.69 for second phase of solar power.

ERC said it took cognizance of the appropriate commercial operations date of the plans “to avoid any deficit occurring in the funds should these plants remain unaccounted for.”

Transco sought regulatory approval in December to collect a feed-in tariff allowance or FIT-All of 10.25 centavos a kWh from consumers starting this year but the ERC approved a higher rate based on certain factors and assumptions such as the total capacity of FIT-qualified projects and electricity sales.