Power rates up by January

MANILA, Philippines - Even as pump prices continue to fall, higher electricity rates will take effect in January 2015.

Executive director Saturnino Juan said the Energy Regulatory Commission (ERC) has approved the feed-in-tariff allowance (FIT-ALL) for renewable energy projects.

“The long wait is over,” he said. “We will have the FIT system effective January 2015 billing.”

Due to FIT-ALL, electricity rates would be higher by four centavos and this would be slapped on all on-grid electricity consumers, Juan said.

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

At a rate of 4 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 used to pay off the debts of the National Power Corp. (Napocor).

It will ensure that renewable energy developers under the FIT system will be paid in full for their actual electricity generation based on the fixed tariff approved for them.

Juan said state-owned National Transmission Co. (Transco) will implement the FIT-All, which is mandated under the Renewable Energy Act of 2008.

Transco said the grant of a provisional authority would allow it to perform its duties to pay the renewable energy developers the FIT rate which they are entitled to, thereby allowing their continued operations. 

After collection, Transco, as mandated by the ERC, would administer the fund.

Under the FIT system, renewable energy companies are entitled to the following FIT rates: P9.68 per kwh for solar power, P8.53 per kwh for wind and P5.90 per kwh for run-of-river hydroelectric power.

In its decision issued in October, the ERC    said that it has found Transco’s petition, together with its supporting documents, sufficient to grant the provisional authority to implement the FIT-ALL.

“For this purpose, all distribution utilities, retail electricity suppliers, the National Grid Corp. of the Philippines are hereby directed to adopt the necessary modifications in their respective billing and collection systems to effect the implementation of the said FIT-ALL as a separate line item in their bills to end-users starting in the January 2015 billing and remit the same in accordance with the FIT-ALL guidelines,” the ERC said.

The government has been trying to attract investors into the renewable energy sector amid calls among environmental groups to develop cleaner sources of energy other than coal.

The filing of the FIT-All comes while the Philippines is grappling with a looming power crisis in the summer of 2015.