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By Sheldeen Joy Talavera, Correspondent
CONSUMERS might experience increased electricity costs starting next month as the Energy Regulatory Commission (ERC) sanctioned a new feed-in tariff allowance (FIT-All) designated for compensating renewable energy (RE) developers.
At a press conference on Monday, ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan stated that the commission has sanctioned a new charge of P0.2073 per kilowatt-hour (kWh), surpassing the P0.1189 per kWh that was previously applied.
“According to the guidelines of the feed-in tariff system issued by the ERC, FIT-eligible facilities are guaranteed to receive the approved rate. If they have already produced and supplied this electricity, they must be compensated as this is fundamentally a commitment we made, supported by law,” Mr. Juan remarked.
The FIT-All is a standardized fee assessed to all on-grid electricity consumers to foster the development and advocacy of renewable energy.
Payments are directed to the FIT-All fund established and overseen by the National Transmission Corp. (TransCo). The fund is allocated towards compensating eligible RE developers who have secured fixed rates for electricity generated by their operations.
As the administrator, TransCo is responsible for submitting the application to the ERC to ascertain the yearly FIT-All rate.
The ERC mentioned that it has conducted public consultations nationwide and has “thoroughly evaluated” the application from TransCo.
“This resolution represents a careful compromise. It ensures the expansion of renewable energy that our nation requires, while keeping electricity prices manageable for every Filipino householdhold and enterprise,” Mr. Juan commented.
As per the ERC, the new charge accounts for outstanding obligations and provisions a minor buffer fund to avert delays in future payments to RE producers.
The funds are necessary to address a P19.06-billion FIT disparity and create a P3.74-billion working capital reserve, which acts as a buffer to ensure prompt payments to RE producers.
The ERC has mandated an immediate audit to confirm that the FIT-All fund is managed appropriately. All stakeholders involved, including grid operators and electricity distributors, have been instructed to make their records accessible for this review.
The National Association of Electricity Consumers for Reforms (Nasecore) has urged complete transparency and accountability in FIT-All rate modifications, asserting that public consultations are insufficient.
In a statement provided to BusinessWorld, the consumer organization called on the ERC to publish an annual audit of the FIT-All fund and to offer comprehensive explanations of the calculations used to identify any deficits necessitating rate adjustments.
Nasecore also requested that the regulatory body consider alternative solutions to maintain RE funding without placing excessive financial burdens on consumers.
“Transparency is mandatory; it is both a legal and moral responsibility. Should the ERC fail to release the audit and furnish appropriate documentation and accountability, it can only signify a breakdown in regulatory oversight. Consumers deserve clarity on how their money is collected and utilized,” stated Nasecore President Patronilo L. Ilagan.
ANOTHER INCREASE
The ERC additionally ratified the suggested new market fee of the Independent Electricity Market Operator of the Philippines (IEMOP) for the period of 2025 to 2027, aimed at enhancing the operations of the Wholesale Electricity Spot Market (WESM).
The new market fee of P0.0071 per kWh represents the cost of managing and running the WESM, which will be charged to generators engaging in the spot market.
The sanctioned fee encompasses the operational, administrative, and capital expenditure budgets of both IEMOP as the market operator and the Philippine Electricity Market Corp. (PEMC), which serves as the governing body of the WESM.
According to the ERC, the market fee guarantees “a reliable and transparent WESM,” as it affords cost predictability for generators and assures the integrity of the market’s essential functions such as pricing, settlement, and data reporting.
The allocation comprises vital IT and cybersecurity enhancements.
“This approval represents a crucial advancement in the ongoing reform of the electricity market. It guarantees that IEMOP and PEMC can operate sustainably and fulfill their obligations, harmonizing industry requirements with accountability to consumers,” Mr. Juan stated. “This decision is a part of our ongoing efforts to foster a secure, competitive, and consumer-focused power industry.”
WESM is the platform where energy firms can acquire power when their long-term contracted power supply falls short of customer demand.
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