ERC Sets a Lower 2018 Feed-in Tariff Allowance

The Energy Regulatory Commission (ERC) approved the application of the National Transmission Corporation (TransCo) for the Feed-In Tariff (FIT-All) Allowance for Calendar Year 2018.  The ERC’s approval, which was embodied in a Decision issued in relation to ERC Case No. 2017-079 RC, authorized TransCo to collect a FIT-All rate equivalent to PhP0.2226/kWh, instead of the former’s proposal of PhP0.2932/kWh.  

“The ERC-approved FIT-All is lower by PhP0.0706/kWh vis-à-vis TransCo’s proposed rate, and will reflect a PhP0.0337/kWh reduction from the current PhP0.2563/kWh FIT-All rate.  The variance is attributed to the discrepancy in the plant capacities used by TransCo and ERC in computing for the FIT-All, among others.  In particular, ERC made use of the capacity of FIT-eligible plants with approved Certificate of Compliance (COC), whereas TransCo used the projected FIT-eligible plants for 2018, including plants with nomination from the Department of Energy (DOE).  There are other diverging factors, such as the FIT rates and the cost recovery rate, that contributed to the discrepancy in the FIT-All computation”, ERC Chairperson and CEO Agnes VST Devanadera clarified.  

The FIT-All is a uniform charge in PhP/kWh payable by all electricity users that is calculated and set annually.  Distribution utilities (DUs), the National Grid Corporation of the Philippines (NGCP), and Retail Electricity Suppliers (RES) serves as collecting agents, and the proceeds go to the FIT-All Fund which is being administered by the TransCo.   The FIT-All mechanism was established pursuant to the Renewable Energy Act of 2008 which aims to spur the development of emerging renewable power sources such as wind, solar, run-of-river hydro, and biomass facilities.  

    “The new FIT-All rate shall be charged to all on-grid consumers supplied with electricity through the distribution or transmission network starting the immediately succeeding billing period following TransCo’s receipt of the ERC Decision.  This reduction in the FIT-All will mitigate the impact of the impending increase in rates due to the expected increase in electric power demand and dwindling power supply in the coming summer months”, ERC Chair Devanadera concluded.