ERC greenlights hike in consumer-borne renewable power incentive

May 19, 2017 - 12:18 PM
Reuters file photo shows a worker installing solar panels. The BOI has just approved a P4.15-billion solar project in San Manuel, Pangasinan, with a total land area of approximately 70 hectares. It will use fixed photovoltaics (PV) modules for the generation of electricity with a peak capacity of up to 68.7 megawatts (MW). REUTERS FILE

MANILA, Philippines — A few days after approving Manila Electric Co.’s P6.9-bllion refund for June, the Energy Regulatory Commission has issued another decision, this time approving the National Transmission Corp.’s 2016 petition for a 6-centavo increase in the feed-in tariff allowance.

The allowance is an incentive to encourage local renewable energy development that is passed on to consumers. The ERC decision to hike it, issued Thursday, means that from next month, the fit-all rate will increase from the current 12 centavos per kilowatt-hour to 18 centavos.

ERC Commissioner Alfredo Non explained that as the number of renewable energy developers increases, so should the incentive given to each, at least until government’s capacity allocations for solar, wind, hydro and biomass investments are filled up.

He added that the timing of the approval of the fit-rate hike had nothing to do with the Meralco refund, which will average 75 centavos/KWH and also take effect next month.

Non explained that the ERC needed to decide on the increase because Transco, which remits the incentive to developers, has been grappling with dwindling funds.

“The situation ng (of the) fit-all fund is precarious, mas marami ang nagiging claim kaysa sa pumapasok (there are more claims than money coming in),” he said.

Transcon has a pending petition for a 2017 fit-all adjustment of another 4 centavos, which would bring the rate to 22 centavos/KWH.

But lawyer Vic Dimagiba, president of the consumer group Laban Konsyumer Inc., said the government should consider shouldering this cost instead of passing this on to the public.

The ERC said this is feasible but can only be implemented if Congress amends the Renewable Energy Act.