ERC raises concerns over DOE’s net metering rules

MANILA, Philippines — The Energy Regulatory Commission (ERC) has raised concerns over the draft net metering rules of the Department of Energy.

In a statement, the ERC said the net-metering rules should be made applicable to all types of renewable energy resource and not just focused on a certain type of technology or resource, among others.

“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 need to be considered and addressed,” ERC chairperson and chief executive officer Agnes Devanadera said.

The ERC raised three possible legal drawbacks of the DOE’s draft circular.

The first is the proposed multiple compensation mechanism, which the ERC claimed is not consistent with the provisions of the Renewable Energy (RE) Act and the Electric Power Industry Reform Act (EPIRA).

ERC also pointed that the “own-use RE systems with above 100 kW capacity” and “own-use RE systems as emergency supply option” are not supported by the express provisions of the RE Act.

Lastly, ERC said the responsibilities imposed upon it had already been addressed with the promulgation of the amended net-metering rules.

ERC said the use of retail rate as one of the compensation mechanisms, as opposed to the use of blended generation cost that the ERC adopted in its recently promulgated amended net-metering rules, would consequently increase the generation cost of the distribution utility through the net-metering program.

ERC’s comment 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 per kilowatt-hour (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 per kWh, and this runs contrary to EPIRA’s policy to provide the least cost power options to captive consumers.

Moreover, the ERC said it has the mandate to issue rules and regulations pertaining to net-metering.

The power regulator has promulgated the net-metering rules in 2013 and the amended net-metering rules last October.