ERC hints of further increase in FIT-All with breach in solar cap

by Myrna Velasco – May 23, 2016

from Manila Bulletin

Solar developers will likely squeeze more misery on the pockets of Filipino consumers, with the Energy Regulatory Commission (ERC) hinting that the feed-in-tariff allowance (FIT-All) component in the electric bills will still rise if the 500-megawatt capacity in the second race will be breached.

“We computed FIT rate based on 500MW limit, so if it will exceed 500MW, we will have to adjust again the FIT-All,” ERC chairman Jose Vicente B. Salazar has indicated.

The recently adjusted FIT-All of P0.1240 per kilowatt hour (kWh) is already seen high, even for the ERC which had rendered the order on its enforcement starting in the April, 2016 bills of the consumers.

“The position of the Commission is to limit it for now to just 500MW, until we can determine what will be its impact on the rates,” Salazar stressed.

He opined, “right now, the P0.1240 (per kWh) is already a big amount considering that previously, it was only at P0.04 per kWh.”

It is the ERC that has been setting some balance on the cost impact of the FITs being granted to the renewable energy (RE) developers, but the alliance of the Department of Energy (DOE) and the National Renewable Energy Board (NREB) on the other side of the pole has been easily yielding to their subsidy addictions.

There is already a bid for third round of solar FIT rate of P7.59 per kWh that the NREB has been firming up for submission to the energy department.

In last week’s briefing with the media, Energy Secretary Zenaida Y. Monsada similarly tipped off that the FIT-incentivized solar capacity would absolutely surpass the 500MW cap.

She has not given the exact figure on the anticipated spare, but she indicated it will be by a sizeable capacity. The energy department cannot also categorically say if such will warrant eventual FIT-All hike.

The second race on solar developments ended March 15 this year, but the list of the FIT grantees of P8.69 per kWh has not been officially issued by the DOE until now.

The energy secretary just apprised media that they were already on “the third version of the list” last week. It is the hope of the industry that “wizardry” in the form of political or covetous corporate maneuvers is not being done on that list.

Filipino consumers are similarly seeking for an end to the investors’ abysmal FIT dependence given that the costs of both wind and solar technologies have already declined significantly, and that there are other incentives under the RE law that can underpin their project capital outlays.