FIT-All of P0.24/kWh to hit consumers harder

by Myrna Velasco – October 13, 2016

from Manila Bulletin

The price of so-called clean energy is going to hit harder on Filipino consumers with the targeted application of up to P0.24 per kilowatt-hour (kWh)feed-in-tariff allowance (FIT-All) by fund administrator National Transmission Corporation.

The rate essentially doubles the P0.12 per kWh FIT-All currently reflected in the electric bills as incentive to renewable energy (RE) developments.

A highly placed source confirmed that the initial FIT-All calculation given by TransCo as advance information to the Energy Regulatory Commission (ERC) had been to the tune of R0.24 per kWh.

It will account for FIT-All pass-on in the bills for regulatory year 2017, inclusive of cost under-recoveries for the current year.

Nevertheless, it was indicated that there might still be a chance that the filing could be set leaner at R0.20 per kWh.

The TransCo application is expected to be lodged with the ERC by the end of this month.

It is the ERC that has been more circumspect on FIT-All charge escalations, that it is already calling on the Department of Energy (DOE) to slow down on proposing “further incentive promises” until social backlash of higher FIT-All is assessed.

Bulk of the out-of-consumers-pocket RE subsidies would be funneled to project installations for wind and solar technologies.

Wind has close to 400 megawatts of installations; while for solar, the initially FIT-qualified projects already breached the 500MW cap.

At this point, the ERC temporarily stalls the award of FIT certificate of compliance (FIT-COCs) to solar projects due to complaints of “muddled validation” of project completions.

Long before the installations of solar and wind RE projects, the DOE has been cautioned about the repercussions of punishing FIT subsidy that the consumers would bear over 20-year stretch. That was unheeded, with energy officials promising then that the FIT may already be lower in the bills as early as year 2016 as these RE technologies were also seen reaching grid party at that time.

The energy department was also apprised that since wind and solar technology costs have been dropping globally, it must have been a prudent move to wait so the consumers could be spared of financially-oppressive FIT charges.

That plea too was neglected, and the government instead sanctioned “gold rush” into RE developments.

The drastic drop in fuel prices – coal, oil and gas in particular – scuttled the RE developers and DOE’s projections, hence, FIT Administrator TransCo is left with no option but to continually apply for higher FIT-All charges.