ERC okays Northwind Power petition

MANILA, Philippines - The Energy Regulatory Commission (ERC) has provisionally approved the application of Northwind Power Development Corp. for the adoption of the feed-in-tariff (FIT) of P9.30 per kilowatthour (kwh).

In an order signed last June 6, the ERC said the approved FIT shall be effective and collected only upon the final approval of the FIT for emerging renewable energy technologies, specifically for wind energy.

FIT is the electricity charged to every renewable energy source and guarantees payment to renewable energy developers.

In its order, the ERC said based on their initial evaluation, the approval of Northwind’s FIT will redound to the benefit of the consumers in terms of continuous, reliable, efficient and affordable power supply as mandated by Republic Act 9136 or Electric Power Industry Reform Act (EPIRA).

The ERC said the approved FIT for Northwind is lower than the industry’s expectation.

“On May 16, 2011, the National Renewable Energy Board (NREB) filed a petition to initiate rule-making for the adoption of the FIT wherein the recommended FIT for wind energy is P10.37 per kwh and an installation target of 220 MW,” the ERC noted.

The ERC underscored the need for the approval of Northwind’s application to allow the company to raise capital for its projects.

“Considering the Northwind’s proposed FIT is lower by more than P1 per kwh than the general FIT for wind energy as recommended by the NREB and considering further that it is in dire need of financial assistance from banking institutions, the commission deems it appropriate to provisionally approve its proposed FIT,” it said.

According to the ERC, under Section 1.4 of the FIT Rules, renewable energy plants which have been in operation prior to the effectivity of the Renewable Energy Act of 2008 may be granted lower FITs specific to them upon application and hearing.

Northwind is planning to put up new wind projects in Aparri, Cagayan and Pamplona, Cagayan Valley estimated at around 40 MW each.

Ayala Corp.’s wholly-owned unit Michigan Power Inc. acquired a 50 percent stake in Northwind for P512 million, plus an additional payment depending on certain performance indicators. The Ayalas will participate in these new projects of Northwind.