Renewables hike power rates

by Alena Mae S. Flores
from Manila Standard Today, 18 December 2015

Power rates will increase by more than P0.10 per kilowatt-hour next year once National Transmission Corp. is allowed to accommodate the feed-in tariff granted to renewable sources of energy.

Energy Regulatory Commission chairman Jose Vicente Salazar told reporters it recently made permanent the P0.0406 per kWh feed-in tariff allowance for 2015. The next step is for TransCo to petition for the 2016 feed-in tariff allowance and have it approved by the energy regulator.

The feed-in tariff allowance is the per kWh uniform rate charged to consumers as incentive payment to renewable energy projects as required by the Renewable Energy Law of 2008. It is a line item in the bill of power consumers similar to the universal charge.

“We approved finally the P0.04 but we also know that there is subsequent [application]. What we want is for them to update it, forecast it based on the renewable energy capacities coming in,” Salazar said.

“We encourage them to file immediately so we can update,” he said.

Government sources said TransCo was set to file a feed-in tariff allowance of more than P0.10 per kWh, which would be reflected in the bills of consumers starting next year. Another source said TransCo was set to file for the higher feed-in tariff allowance next week.

The ERC provisionally approved in November last year the P0.0406 per kWh FIT-All that was only implemented in January this year.

TransCo operated the country’s transmission highway until it was transferred to National Grid Corp. of the Philippines in 2010 following the signing of a concession agreement. TransCo now monitors National Grid’s compliance to the concession agreement.

TransCo collects the feed-in tariff allowance and uses it to pay the feed in tariff rates of the renewable energy projects, specifically run-of-river hydro (P5.90 per kWh); biomass (P6.63 per kWh ); wind (P8.53 per kWh), wind2 (P7.90 per kWh); solar1 (P9.68 per kWh) and solar2 (P8.89 per kWh).

The ERC in November approved a feed-in tariff rate of P7.40 per kilowatt-hour for new wind power projects with a combined capacity of 400 megawatts.

The new rate, which will be applied to new wind power projects, is lower by P1.13 per kWh than the P8.53 per kWh enjoyed by the first batch of wind projects and the P7.93 per kWh rate endorsed by the National Renewable Energy Board.

“We already approved wind FIT2 of P7.40 [per kWh] during our Oct. 6 commission meeting. It’s still being routed to the members of the commission for our signature,” Salazar earlier said.

Salazar said the NREB applied for a feed-in tariff rate of P7.93 per kWh.

ERC earlier approved a feed-in tariff rate of P8.53 per kWh for the first 200 MW of wind projects that qualified under the first wave of installation targets.

The Energy Department then increased the installation target to 400 MW, amid strong investor interest.