SC asked to stop Meralco rate hike

by Tara Quismundo, January 7, 2015
from Philippine Daily Inquirer

MANILA, Philippines–The intent may be noble, but why should consumers pay for renewable energy facilities that are still on the drawing board?

A Makati City taxpayer has asked the Supreme Court to stop the “advance collection” of an extra P0.406 per kilowatt-hour (kWh) in charges to support the development of renewable energy production in the country, describing it as “unreasonable” and “oppressive.”

In his 30-page petition, Remigio Michael Ancheta II, a Meralco customer “adversely affected” by the new fee, sought the high court’s issuance of an immediate temporary restraining order (TRO) against the collection of the feed-in tariff allowance (FIT-All) charge from energy users.

“Unless this Honorable Court strikes down this unreasonable and oppressive attempt to collect from the public an amount that they can otherwise use for basic necessities, the consumers will be required to bear the burden by the start of year 2015,” he said.

Ancheta impleaded the Energy Regulatory Commission (ERC), National Transmission Corp. (Transco), National Renewable Energy Board (NREB) and Manila Electric Co. (Meralco) for passing on to consumers the additional amount.

The FIT-All charge, to be reflected as a separate line item on the billing of Meralco consumers this month, aims to build a fund to support the development of renewable energy sources—wind, solar, ocean, run-of-river hydropower and biomass—in the country, gradually helping cut down the use of fossil fuel and other “pollutive” energy sources.

Established as part of the implementation of the 2008 Renewable Energy Act, the (FIT-All) system “offers guaranteed payments on a fixed rate per kWh for emerging renewable sources, excluding any generation for own use.”

The ERC gave Transco the authority to handle the collection of the

FIT-All—through Meralco and other distributors—and “to ensure that the FIT-All Fund is “sufficient to pay all renewable energy producers regularly.”

Transco’s mandate also includes building a buffer fund that would support “working capital requirements in case some customers default or delay in their obligations to collect and remit the FIT-All proceeds,” Ancheta said quoting the ERC’s FIT rules and guidelines.

Reached by the Inquirer on Tuesday, Meralco declined to comment on Ancheta’s petition, noting that the issue could be “best” answered by government officials.

The petitioner said the advance collection of the FIT-All had been “erroneously provided” under the rules and guidelines set by the ERC for the benefit of renewable energy developers.

“The FIT-All will require the consumers to pay in advance of their actual consumption regardless of whether the projected renewable energy plants are constructed and without any renewable energy actually being produced,” Ancheta said.

Based on Ancheta’s estimates, a household with an average consumption of 200 kWh per month would have to shell out an additional P8.12 with the extra FIT-All charge in the monthly bill.

The amount would mean some P2.76 billion in additional fees collected throughout 2015, or about P230.12 million a month, he said, using the year’s forecast national sales.

In all, Ancheta said, he “never realized that a laudable law,” such as the Renewable Energy Act, “could be implemented in a manner that is beyond the mandate of the law and unduly burdens and prejudices the consuming public.”

The petitioner said the ERC committed grave abuse of discretion when it allowed the advance collection of the FIT-All charge, in the process also going beyond the scope of the Renewable Energy Act.

It “expanded the scope of Renewable Energy Act of 2008,” Ancheta said. “[T]he ERC would want the public to pay in advance of the production of electricity, or worse, [the] construction of the power plants.”

“The consuming public is being made to pay even if the renewable energy plants projected to participate in the FIT program are not yet constructed or has yet to operate, and even before the electricity is produced,” he added.

The petition asked the Supreme Court to annul, set aside and declare unconstitutional the ERC’s FIT-All rules and guidelines imposing the additional four-centavo charge, and the energy regulator’s Oct. 7, 2014 order granting Transco the power to collect the FIT-All charge.

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