ERC seeks public view in FIT rules

MANILA, Philippines - The Energy Regulatory Commission (ERC) is seeking public comments for a possible revision of the feed-in tariff (FIT) rules.

Rules on the competitive bidding process for the FIT, the role of the National Grid Corp. of the Philippines (NGCP) as a settlement agent and the calculation of FIT-Allowance will be tackled in hearings.

“All interested parties are invited to submit their comments in both hard and soft copies on the Issues Paper on or before April 18,” ERC said.

First, ERC said the competitive bidding process will be discussed given a letter from Senator Sergio Osmeña.

“Instead of using the cost-based methodology as outlined in Section 5 of the FIT rules, the ERC may use a competitive bidding process to ensure lower FIT rules,” Osmeña proposed.

Furthermore, the proposal said there is no specific ratemaking mechanism under existing rules.

ERC has the mandate to set the rules as long as requirements are met regarding priority connections to and priority purchase and transmission of electricity to the grid; and a fixed tariff will be implemented not more than 12 years.

Osmeña is the co-chairman of the Joint Congressional Power Commission (JCPC), which wants to bid out incentives for upcoming renewable energy projects instead of all ventures getting perks.

The FIT scheme, whose implementation is already delayed by almost three years, guarantees investments of renewable energy firms through fixed rates that would be shouldered by consumers over a set period of time.

Proposed FIT rates are P7 per kilowatt-hour (kwh) for biomass, P17.65 per kwh for ocean technology, P17.95 per kwh for solar power, P6.15 per kwh for run-of-river hydropower and P10.37 per kwh for wind power. The rates are estimated to add roughly P0.12 per kwh to consumers electricity bills.

Also under contention is the settlement agent role of NGCP, which manages the National Transmission Corp.’s transmission business.

“The legality of NGCP, being a private corporation, as the settlement agent for the FIT, is in question,” ERC said, adding that the FIT-Allowance fund is a public fund that should not be left to the administration of a private entity.

Under existing rules, NGCP will collect information on energy deliveries and renewable energy generation for on-grid areas, audit the metering, and determine the FIT-Allowance to be charged to end-users.

“Because of this, industry stakeholders are looking at other entities that are government-owned to act as the administrator of the FIT-Allowance Fund,” ERC said.

NGCP is also tasked to determine monthly payments to eligible renewable energy plants and collect the FIT-Allowance fund.”In view of this, the ERC is setting the venue for suggestions and comments on whether it should retain the NGCP as the administrator of the funds or it should designate a government-owned entity to administer the same,” ERC said.