ERC OKs lower feed-in tariff allowance rate

MANILA, Philippines — The Energy Regulatory Commission (ERC) has approved a lower feed-in tariff allowance (FIT-All) rate, which covers payments to renewable energy developers.

The FIT-All rate will help mitigate the increase in consumers’ electricity bills during the summer season.

In an order, the ERC allowed the National Transmission Corp. (TransCo) to collect 22.26 centavos per kilowatt-hour (kwh) from all on-grid customers.

ERC chairperson Agnes Devanadera said the approved 2018 FIT-All rate is 7.06 centavos per kwh lower than the 29.32 centavos per kwh rate the TransCo proposed.

The rate  also reflects a 3.37 centavo per kwh reduction from the current 25.63 centavos per kwh charged to consumers.

“The new FIT-All rate shall be charged to all on-grid consumers supplied with electricity through the distribution or transmission network starting the immediately succeeding billing period following TransCo’s receipt of the ERC Decision,” Devanadera said.

“This reduction in the FIT-All will mitigate the impact of the impending increase in rates due to the expected increase in electric power demand and dwindling power supply in the coming summer months,” she said.

Historically, electricity rates increase during the summer months due to increase in consumption and demand amid higher temperature.

In granting a lower FIT-All rate, Devanadera said there was a discrepancy in the plant capacities used by TransCo and ERC in computing for the FIT-All.

“In particular, ERC made use of the capacity of FIT-eligible plants with approved certificate of compliance (COC), whereas TransCo used the projected FIT-eligible plants for 2018, including plants with nomination from the Department of Energy (DOE),” Devanadera said.

“There are other diverging factors, such as the FIT rates and the cost recovery rate, that contributed to the discrepancy in the FIT-All computation,” she said.

The FIT-All is a uniform charge billed to all on-grid electricity consumers, reflected as a separate component in monthly electricity bills, to cover payments to renewable energy developers under the FIT system.

Distribution utilities, the National Grid Corp. of the Philippines, and Retail Electricity Suppliers serve as collecting agents. The proceeds go to the FIT-All Fund which is being administered by the TransCo.