By
Lenie Lectura - December 11, 2019
THE Energy Regulatory
Commission (ERC) on Tuesday said it called the attention of the Department of
Energy (DOE) in connection with its draft circular on-net metering scheme.
“Upon perusal of the
draft department circular, we were of the opinion that there are possible legal
impediments in the implementation of the DOE circular. The cross-cutting
concerns of energy security, affordability, and reliability also needs to be
considered and addressed,” said ERC Chairman and CEO Agnes VST Devanadera.
The DOE’s draft
circular entitled, “Policies to Enhance the Net-Metering Program for Renewable
Energy Systems and Other Mechanisms to Ensure Energy Security” should be
imposed on all types of renewable-energy sources, the commission noted.
The ERC pointed this
out in a letter it sent to the DOE. It averred that the Net-Metering Rules
should be made applicable to all types of RE and not just focused on a certain
type of technology or resource.
“The Commission fully
supports the development of the RE Program, and we commend the DOE for coming
up with its draft department circular that seeks to encourage and promote
electricity end-users participation into the Net-Metering
Program. The department circular, however, should not veer away from
the confines of the law that it seeks to implement,” Devanadera stated.
The ERC raised the
following possible legal drawbacks of the DOE’s draft circular: The proposed
multiple compensation mechanism is not consistent with the provisions of the RE
Act and the Electric Power Industry Reform Act (Epira); Sections 6 (Own-Use RE
Systems with Above 100 kW capacity) and 7 (Own-Use RE Systems as Emergency
Supply Option) are not supported by the express provisions of the RE Act;
and the responsibilities imposed upon ERC under Section 11 have
already been addressed with the promulgation of the Amended Net-Metering Rules.
The DOE draft rules
also cited the use of retail rate as one of the compensation mechanisms, as
opposed to the use of blended generation cost that the ERC adopted. This, the
ERC pointed out, will consequently increase the generation cost of the
distribution utility through the net-metering program.
This was based on the
simulation it conducted on the impact of using the retail rate as the price of
export at different levels of net-metering penetration. “The
resulting retail rate of P13.8528/kWh at the 30-percent maximum net-metering
penetration level is even higher than the last Feed-In-Tariff [FiT] rate set at
P8.69/kWh, and this runs contrary to the Epira’s policy to provide the least
cost power options to captive consumers,” the ERC noted.
The commission earlier
amended its Net-Metering Rules. It asserted that it has the mandate to issue
rules and regulations pertaining to Net-Metering and it has fulfilled such
mandate in its promulgation of the Net-Metering Rules in 2013 and the Amended
Net-Metering Rules last October 2019.
The recent amendments
to the Net-Metering Rules of the ERC sought to: improve the
interconnection setup to take advantage of new technologies and to implement
the Renewable Portfolio Standards (RPS); simplify permitting procedures; reduce
installation soft costs; minimize the rate impact on non-net-metering
customers; address the subsidy impact on the non-net-metering customers;
rationalize entitlement to the lifeline subsidy rate; and implement a stringent
reporting process.
The DOE has yet to
comment on the ERC letter.
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