Electricity bills to rise this year

A YEAR and P2.5 billion in collections since power consumers started paying the feed-in-tariff allowance (FIT-All), households are set to pay a higher round of fees for renewable energy (RE). The FIT-All is the uniform charge all power consumers pay (as a line item in electricity bills) to fund guaranteed energy rates for qualified RE projects and encourage more solar, wind, mini-hydro and biomass developments.

According to the National Transmission Commission (Transco), which manages the FIT-All fund, the first inflow of collections was last March 16. An estimated P2.5 billion has been remitted to the fund over a one-year period, Transco said.

Going into the second year of FIT-All collections, the Energy Regulatory Commission (ERC) is finalizing its order on the new—and higher—FIT-All, which was provisionally approved earlier this month, ERC Chair Jose Vicente B. Salazar said in a text message. “The order is now being finalized for the signature of the members of the commission.”

The regulatory body assessed the list of existing FIT-qualified projects as well as pending applications that are likely to have met the requirements for eligibility before the March 15 deadline for the second batch of solar FIT. It should be noted that the ERC-approved FIT rates are P6.63 a kilowatt-hour (kWh) for biomass, P5.90 a kWh for hydro, P8.53 a kWh for the first phase of wind and P7.40 a kWh for the second phase of wind, as well as P9.68 a kWh for the first phase of solar and P8.69 a kWh for the second phase of solar power.

“The list totaled 1,054 MW (megawatts). Using this capacity, we provisionally computed the FIT-All to be 12.40 centavos (a kWh),” Salazar said.

All power consumers connected to the grid would do well to brace themselves for a year of higher charges as more RE projects qualify for FIT incentives.

A typical household consumer of Manila Electric Co. uses 200 kWh of electricity a month. All other power bill components being equal, the 200kWh consumer will have to pay an additional P24.80 a month starting April if the government formally approves the higher FIT-All rate.

The order was in response to Transco’s application, as FIT fund manager, to collect a higher FIT-All than the current 4 centavos a kWh. TransCo was designated as the FIT-All fund administrator on behalf of renewable energy producers.

Energy experts said the FIT scheme would initially result in higher power bills but this should lead to stable power prices over time. FIT rates are expected to decrease as RE technologies get cheaper and more efficient. The price of RE power is also seen to remain stable or even get cheaper in the long run compared to oil and coal, which get depleted and thus demand higher prices over time.

The government allowed the installation of 500 MW of solar power projects, 400 MW of wind power projects, 250 MW of hydro and 250 MW of biomass projects.

Transco sought the regulator’s approval in December to collect a FIT-All of 10.25 centavos a kWh from consumers starting this year, but the ERC approved a higher rate based on certain assumptions such as the total capacity of 1,054 MW that was likely to qualify for FIT.

In is application, the agency said it sought a lower FIT-All from the computed level of 14.70 centavos a kWh in view of the ERC’s decision limiting the forecast renewable energy generation included in the computation to those renewable energy plants with certificates of endorsement.