FiT-All adjustment likely to raise April bills

by Lenie Lectura – March 21, 2016

from Business Mirror

Consumers will pay an additional P0.0834 per kilowatt-hour (kWh) in electricity rates, representing the provisionally approved feed-in tariff allowance (FiT-All) of P0.1240 per kWh by the Energy Regulatory Commission (ERC).

The rate will be collected from electricity end-users next month, as this will be reflected in their electricity bills as a separate item, as mandated by the Renewable Energy Act of 2008, or Republic Act 9513.

The FiT-All serves as an incentive to renewable-energy (RE) developers to ensure the viability of their projects. RE includes wind, run-of-river hydro, solar, geothermal and biomass. Consumers are the ones who shoulder the FiT-All, a separate line component in the power bills.

The P0.1240-per-kWh FiT-All is lower than the current FiT-All rate of P0.0406 per kWh, but higher than what National Transmission Corp. (Transco) applied for.

The distribution utilities (DUs) are the ones that collect the FiT-All from end-consumers. They will remit this to Transco, which was tasked by the ERC to administer the FiT-All fund. The FiT-All fund, in turn, will be used to pay the FiT rates of RE projects.

“As per ERC record, Transco received the order today [Monday]. The new FiT-All will be reflected in the April bill to consumers,” ERC Spokesman Floresinda Digal said in a text message. Manila Electric Co. (Meralco) Spokesman Joe Zaldarriaga confirmed that the FiT-All rate will be collected from its millions of customers. “Yes, we will implement based on the ERC order,” he said.

He added that Meralco’s first remittance of collections to Transco was made in March 2015, when the first FiT-All rates were collected in the February bills, covering the January consumption of Meralco customers.

While the FIT system does spell out an extra few centavos in additional power rates, it, nonetheless, encourages more RE plants to be built.

Industry experts pointed out that RE plants help temper prices in the 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.

Moreover, they pointed out that “for a few centavos, it will help improve or, at least, stop the worsening air quality, which has led to different ailments, like asthma, for those living in the metropolis.”

RE power plants, they stressed, allow the displacement of other more polluting sources of electricity, such as coal and oil. This, in effect, lessens the carbon emissions from these plants.