The Aboitiz-led Visayan Electric Co. (Veco) is urging the Energy Regulatory Commission to amend certain provisions in the feed-in tariff (FIT) rules to avoid unwarranted cross-subsidies within and across the three grids and to ensure the fair allocation of the 760-megawatt installation target for renewable energy (RE).
This, according to Veco, will help protect all power consumers from paying higher prices for electricity produced from RE sources, even if they do not benefit from it.
As it is, the proposed FIT rates for each renewable energy source will result in additional charges dubbed FIT-Allowance (FIT-ALL), a universal levy to be collected from all electricity consumers.
Under the rules, “energy from the embedded eligible RE plants will be priced based on the average generation cost and the proceeds, together with the FIT-ALL collected from the utility’s customers will be remitted to National Grid Corp. of the Philippines to be used to pay the RE generators.”
“This could result in both intra-grid and inter-grid subsidies as the beneficiary of the energy is the host utility while the payments for the excess cost will be shouldered by all customers,” it added.
Veco said that even if all the electricity to be produced from RE sources were supplied to the grid, some grids might have disproportionately higher FIT-All compared to the amount of RE they receive.
This is because one grid may host RE projects that have higher FIT rates than other grids.—Amy R. Remo