By Lenie Lectura - May 20, 2018
Consumers should brace for an
increase in their electricity bills starting June after the Energy Regulatory
Commission (ERC) approved a higher feed-in-tariff allowance (FiT-All) rate of
25.63 centavos per kilowatt-hour (kWh).
The amount is 7.33 centavos per kWh
higher than the current FiT-All rate of 18.30 centavos per kWh. It is also
higher than the 22.91 centavos per kWh rate applied by the National
Transmission Corp. (Transco), the administrator of the FiT-All fund.
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.
In its 49-page decision, the
commission 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 per kWh which
represents the increase from the current FiT-All rate. The approved FiT-All
rate is sufficient to cover the obligations,” the ERC 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 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 2016 FiT-All rate of 18.30 centavos per kWh.
“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,” the ERC 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.
Transco President Melvin Matibag
acknowledged the backlog in payments owed to RE developers.
“Backlog was caused by a combination
of a lot of things though not attributable to Transco because we are only the
administrator. We are very much concerned and we are doing our best to resolve
the issue. We are also looking for other options to address the backlog,” he
said. “With the ERC approval, we can somehow address the backlog on the
payment of FiT-All.”
Matibag was referring to earlier
proposals to ask financial assistance from the World Bank or the Asian
Infrastructure Investment Bank to pay RE developers.
“We are looking for funds so that we
can cover the backlog without interests…30 to 40 years of loan payment. The
World Bank and AIIB have untouched energy funds for renewable that could be
availed of,” he said.
Also, the Transco chief said he
looks forward to the immediate resolution of the 2018 FiT-All rate application.
Distribution utilities, and not
Transco, will collect the new FiT-All rate from consumers.
When sought for comment, Manila
Electric Co. (Meralco) said it has already been advised by Transco that the new
FiT-All rate will take effect in June.
“Therefore, we need to implement
it,” Meralco utility economics Head Lawrence Fernandez said in a text message.
Consumer advocacy group Laban
Konsyumer Inc. (LKI) said it will appeal the decision. “As soon as we receive
our copy as intervenor, we shall invoke again the same reason for the 2016
FiT-All. Eventually, we will bring the case to the Court of Appeals for gross
abuse of judgment and lack of jurisdiction,” LKI President Victor Dimagiba
said.
The LKI earlier asked the ERC to
render null and void its decision to increase FiT-All rates for 2016.
Citing records, The LKI said Transco
applied for a FiT-All for 2016 of 10.25 centavos per kWh. In February 2016 the
ERC provisionally approved a FiT-All rate of 12.40 centavos per kWh. Three
months later, the ERC granted an additional amount of 5.9 centavos per kWh,
bringing the total FiT-All rate for 2016 to 18.30 centavos per kWh.
Dimagiba argued that Transco did not
file for an amendment of its 2016 FIT-All rate application. He asked the ERC
then to render its May 2017 decision null and void for lack of jurisdiction.
He also noted that Transco lawyers
filed an urgent motion to issue the decision on its 2017 FiT-All rate
application on April 11.
“Yet, the decision of the ERC was
dated February 27, but docketed and published on May 11.”
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