SEVERAL years ago, the National Renewable Energy Board (NREB) introduced the concept of “Feed-in-Tariffs” (FIT).
FIT is a euphemistic way of describing subsidies to be paid to some companies that produce electricity from renewable energy sources. These sources include solar, wind, and hydro.
Who pays for these subsidies?
We do.
The FIT system is administered by the state-run National Transmission Corp (TransCo).
TransCo then submits a proposal to the Energy Regulatory Commission (ERC) to collect the feed-in tariff allowance (FIT-All).
In 2020, TransCo asked the ERC to approve its proposed FIT-All rate for 2021 amounting to P0.1881 per kilowatt hour (kWh). Last December, the ERC allowed TransCo to collect a FIT-All equivalent to P0.0983 per kWh from all consumers (us). This amount appears on our monthly electricity bills.
The difference between the amount requested by TransCo (P0.1881 per kWh) and the amount approved by ERC (P0.0983 per kWh) is large and, to me, surprising.
Surely, it is simply a matter of arithmetic. TransCo claims the amount due to approved suppliers and ERC verifies those claims.
Why the discrepancy?
TransCo CEO Melvin Matibag talks of ‘regulatory delays that prioritize consumer welfare over the welfare of suppliers’.
What consumer welfare?
It is difficult to understand why TransCo’s arithmetic is different from that of ERC.
We have a similar situation, not yet resolved as far as I know, between Panay Electric Corp (PECO) and ERC on amounts that should be charged or refunded to PECO’s consumers. There is a discrepancy of over P600 million.
And how about the early adopters of renewable energy generation. Are they receiving the amounts they are due as a result of RA 9367 and RA 9513 implementation?
FIT-All payments resulting from solar energy companies are particularly relevant.
The initial approvals from NREB allocated P9.69 per kWh from companies that generate the first 50 MW. Then, for the next 450 MW, a FIT-All payment of P8.69 per kWh would be payable.
This FIT-All was arrived at in 2014 when President Aquino came to San Carlos, Negros Occidental, to open San Carlos Solar Energy Inc (Sacasol).
Subsequent developments have shown that the FIT-All for solar has been very generous as it is now shown that solar energy can be developed for only around P3 per kWh (compared to the FIT-All of P8.69 per kWh).
Since billions of pesos are involved and these are to be paid by the electricity consumers, care should be made by the relevant government entities that the correct charges are being made.
TransCo and ERC need to get their act together so that the appropriate charges are being made./PN
