Meralco says power rates likely to increase in Feb

MANILA, Philippines - Consumers will see an additional four centavo per kilowatt-hour increase in their February electricity bills as power distributor Manila Electric Co. (Meralco) starts to collect the feed-in tariff-Allowance (FIT-All) charge despite a pending case filed at the Supreme Court against the new bill item, the Energy Regulatory Commission (ERC).

“The February bill will reflect the January supply consumption which includes the FIT-All,” said ERC executive director Saturnino Juan.

In a separate interview, Meralco president Oscar Reyes has confirmed that the February bills would include the FIT-All charge even as the power distributor earlier clarified that the additional four centavo FIT-All charge is not an additional tariff charge that is being sought  by the company but a mere pass-through charge.

The charge became the subject of a case filed at the Supreme Court by lawyer Remigio Michael Ancheta, arguing that FIT-All is unconstitutional.

The FIT-All will be given to renewable energy players as an incentive to invest in the more expensive but less lucrative renewable energy sector. Renewable energy players are solar, wind, biomass and small hydropower companies.

At a rate of four centavos per kilowatt-hour, the FIT-All will be charged to all electricity consumers, similar to a universal charge which is a separate line in electricity bills and is used to pay off the debts of the National Power Corp. (Napocor), the state-owned power company.

Juan said it is not only Meralco that would collect the charge but all other distributors.

“It will be charged to all consumers nationwide,” Juan said.

Industry sources, however, said that while the FIT-All may initially pad electricity bills, in the long term it could eventually result in less volatility at the electricity spot market.

“Renewable energy plants help temper prices in the WESM (Wholesale Electricity Spot Market) as it pushes out the more expensive plants like diesel since RE prices are not subject to the volatility of the market,” an industry source said, explaining that electricity prices could eventually be tempered with the development of renewable energy in the Philippines.