No rate increase from modified renewable tariffs, regulator says

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THE Energy Regulatory Commission (ERC) said a component of electricity bills for renewables development will not be affected by its recently-approved adjustment to the feed-in-tariff (FiT) for 2016 to 2020.

In a resolution, the regulator adopted the adjusted tariff, affirming the use of the 2014 consumer price index and foreign exchange rate in determining its rate, which was previously computed using the 2009 base year.

Using the latter base year would have a “significant impact” on consumers’ electricity bills, it said.

The 2020 FiT for the first batch of eligible solar developers computed using the 2009 base year is P11.4210 per kilowatt-hour (kWh), while the rate using the 2014 base year is P11.2758/kWh.

For the first batch of wind developers, the 2020 FiT using the old base year is P10.2036/kWh, while the adjusted rate now is P9.8976/kWh.


Consumer group Laban Konsyumer had claimed that the latest adjustment would lead to higher power charges.

Victor A. Dimagiba, the group’s president, said this year’s FiT going to Solar Batch 1 rose from P9.68/kWh, the rate in 2015, while the rate for Wind Batch 1 also saw an increase from P8.53/kwh over five years ago.

“These are significant increases, any way you look at them. And this will definitely have an impact on the final rates that consumers have to pay because it will surely be passed on to our detriment,” Mr. Dimagiba said in a statement Tuesday.

But the ERC said the tariff adjustment will not alter the current FiT-allowance (FiT-All), a portion of electricity bills paid for by consumers.

“The implementation of the FiT adjustment will have no impact on the current FiT-All as the current working capital allowance is enough to fund it,” ERC Spokesperson Floresinda B. Digal told BusinessWorld.

She added that the arrears for the adjustment in the past four years will be recovered in the next five years.

The regulator is mandated to adjust the FiT each year for the entire period of its applicability to allow the pass-through of local inflation and foreign exchange variations.

FiT-All was adopted following the implementation of the Renewable Energy Act of 2008 which aims to boost the development and utilization of renewable energy sources. Currently, the rate is P0.0495/kWh, lower than the previous P0.2226/kWh rate.

The National Transmission Corp. administers the collection of this charge. — Adam J. Ang