Higher electricity bills for Filipino consumers starting June

MANILA, Philippines – Consumers face higher electricity bills starting June, after the energy regulator approved a hike in the feed-in-tariff allowance (FIT-All) rate, which is meant to cover payments to renewable energy (RE) developers.

The Energy Regulatory Commission (ERC) approved a new FIT-All rate of 25.63 centavos per kilowatt hour (kWh), higher than the current 18.30 centavos per kWh.

The amount is also a surge from the 22.91 centavos per kWh rate applied by the National Transmission Corporation (TransCo), administrator of the FIT-All fund.

The FIT-All rate is charged to all on-grid electricity consumers, appearing as a separate line item in their bills. (READ: Electricity bills explained: Where does your money go?)

This serves as payment to RE developers who are assured of a fixed rate per kWh for a period of 20 years.

The ERC said in its decision on Monday, May 21, that there is a need to raise the rate, due to the inability to pay in full the claims of FIT-eligible generators.

"The approved FIT-All rate is sufficient to cover the obligations," said the ERC.

The total claim of RE developers was at P40.120 billion as of February 5, 2018. Of this amount, only 82% has been paid. 

Due to late payments, the interest has surged to P527 million as of the same period, according to the ERC.

"The condition has exacerbated to the detriment of the consumers since interest is also charged in the FIT-All fund, thus, based on that and the fact that there is again an alternative prayer in this application, the commission believes that the grant of the adjustment is justified," the ERC said in its decision.

Manila Electric Company (Meralco), the Philippines' largest power distributor, has already been advised of the adjustment in the FIT-All rate.

"[W]e need to implement it," said Meralco utility economics head Lawrence Fernandez. The new FIT-All rate is seen to take effect starting June bills.

Backlog in RE payments

TransCo President Melvin Matibag said the backlog of payments was due to a number of reasons, and "not attributable to TransCo" as it is only an administrator.

"We are very much concerned and we are doing our best to resolve the issue. We are also looking for other options to address the backlog. With the ERC approval, we can somehow address the backlog [in] the payment of FIT-All," Matibag said.

"We want to help both consumers and RE developers not to be burdened by reason of the delay in paying of the FIT," he added.

Consumer group Laban Konsyumer Incorporated (LKI) will appeal the ERC decision.

"As soon as we receive our copy as intervenor, we should invoke again the same reason for the 2016 FIT-All," said LKI president Victor Dimagiba.

The consumer group had also asked the energy regulator to void its decision to hike FIT-All rates for 2016.

LKI said TransCo applied for a FIT-All rate of 10.25 centavos per kWh for 2016.

Back in February 2016, the commission provisionally approved a FIT-All rate of 12.40 centavos per kWh.

Three months later, said LKI, the ERC granted another hike of 5.9 centavos per kWh, bringing the total FIT-All rate for 2016 to 18.30 centavos per kWh.

"Eventually, we will bring the case to the Court of Appeals for gross abuse of judgment and lack of jurisdiction," Dimagiba said. – Rappler.com