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LKI urges reorganized ERC to declare moratorium on FIT ALLOWANCE

Press Statement- September 23, 2018
Laban Konsyumer Inc. (LKI) urges newly reorganized ERC to immediately suspend the resolution of the 2018 and 2019 Feed in Tariff Allowance applications of TRANSCO
Laban Konsyumer Inc. (LKI) discovered glaring defects and flaws in the amount of FIT ALL applied for by TRANSCO during the expository hearing held last Friday, September 21, 2018, for the 2019 Feed in Tariff Allowance rate application of TRANSCO docketed as ERC Case No. 2018-085 RC. In the discussion, the ERC?s Hearing Officer nor the TRANSCO lawyer/ witness could not confirm in open court that the 2019 application was a rollback of the FIT Allowance they had applied for 2018.
Records show that the current FIT All being collected from consumers is P 0.2563/kwh. Based on records, TRANSCO had applied for the 2018 FIT ALL in the amount of P0.2932 (or an increase of P0.0369/kwh), which application has been submitted for ERC?s resolution. Thereafter, TRANSCO filed its application for the 2019 FIT ALL in the amount of P0.2780/kwh, which in its own disclosure (TRANSCO) as of September 2018 was stipulated to be P0.2655/kwh. In the meantime, ERC is poised to issue a provisional authority for the 2018 application of TRANSCO.
With so many conflicting figures presented to ERC by the applicant TRANSO, LKI urged the ERC to declare a moratorium on resolution of the Fit ALL pending applications. LKI, through Dimagiba, pointed out that there is an urgent need for the ERC to sit down with the stakeholders and discuss the merits of continuing the collection of the FIT Allowance. He noted that based on industry sources, renewable energy is being offered to distribution utilities for as low as P2.90/ kWh. Dimagiba also observed that in fact, ERC has regressed all FIT rates to lower amounts. Further, he suggested that ERC also develop a simpler formula for computing the FIT All which can be more easily understood by the consumers and therefore more defensible. In conclusion, Dimagiba said that there is no need to approve the 2018?FIT all application of P0.2932/kWh when TRANSCO?s 2019 application already shows a lower amount.
Dimagiba noted that if ERC takes action and suspends the resolution of the pending applications, ERC will greatly benefit consumers and temper the effects of inflation by providing breathing space from increasing costs. Pursuant to the guidelines, LKI has filed a verified petition before the ERC to intervene, opposing the matter of the application for the approval of of the Feed in Tariff Allowance for calendar year 2019, collection of the FIT All, disbursement of the FIT All fund, and prayer for provisional authority.
Commenting on the FIT All, Dimagiba said that ?the formula and supporting statistics in the computation of the FIT All is too complicated that it effectively defeats the consumers? right to know. We propose that the honorable commission revise and amend the formula. Only the applied incremental increase for the period should be the content of the application.?
LKI further detailed its intervention, saying that ?there are ?ERC-approved degression rates for wind, biomass, solar, and hydro renewable energy after year 2 of the feed-in-tariff. The instant application should comply with the ERC approved degression rate or justify its noncompliance thereto.?
He continued by saying ?the rate will go up before it goes down 2 centavos so that will negate the effect anyway. There won?t be any difference. Both ERC and Transco could not answer my questions. Either they are too confident when I asked them if the application was an increase or a rollback, a rollback of the fit all that ERC and Transco did not know about. I want to highlight the rollback of 2 centavos petitioned and exposed by LKI in the hearing yesterday.?
The group believes that the new ERC headed by Chairperson Devenadera should coordinate with the renewable energy sector and with sister energy agencies regarding rollback. According to the group, ?it is unacceptable that they have a blind reason that they do not know what the other arm is doing or has. There were so many filings at ERC for rate increases, how do we monitor them if they are right and transparent at reasonable and beneficial to consumers?
The group reminded that there are two (2) other pending pleadings before the Honorable Commission that assailed the amount of over-recovery of Feed in Tariff Allowance currently being paid by the consumers. Their statement pointed to the ?verified petition for annulment of Judgement in ERC Case No. 2015-216 RC filed on October 17, 2017 with the prayer to roll back the amount of Php 0.0805b/kWh retroactive to January 2016, as well as the motion for reconsideration dated June 1, 2018 assailing the decision in ERC Case No. 2016-192 RC for being null and void on ground of lack of jurisdiction with the prayer to suspend the amount of Php 0.0733/kwh.?
Dimagiba went on to say that ?LKI continues to oppose the IN THE ALTERNATIVE as to the amount of the feed-in-tariff allowance for the same legal issues now pending before the commission. We also hold the right to submit and propose additional grounds in opposition to the instant application and that it be furnished a copy of the application and documents free of reproduction costs.
On the National Power Corporation ( NPC ) petition- Addressing the National Power Corporation (NPC) petition in ERC Case No. 2018-014 RC, Dimagiba and his group intervenor LKI moved for the denial of the instant application.
Dimagiba said that ?the instant application must be immediately denied moto propio by the Honorable Commission for lack of cause of action and legal basis under Sections 70 and 74 of Republic Act No. 9136. The NPC application seeks to collect additional generation charges of Php 0.9995 per kWh on missionary route consumers. Under the EPIRA, the NPC is not authorized to do so.
Dimagiba and his group LKI, in their intervention, said that under section 70, the NPC shall be responsible for providing power generation in areas that are not connected to the transmission system and the missionary electrification function shall be funded from the revenues from sales in missionary areas and from the universal charge to be collected from all electricity end users as determined by the ERC.
LKI wrote ?under section 74 all forms of cross subsidies from all classes of consumers shall be phased out from the establishment by the ERC of the universal charge. The EPIRA law was approved on June 8, 2001 or seventeen (17) years ago.?
LKI voiced out its concern for Filipino consumers, saying that ?consumers are already overburdened with rising fuel costs, as well as the rise of prices of rice, noodles and other basic commodities. Looking at the bigger picture, prices of most products, goods and services have been skyrocketing, especially with the implementation of the TRAIN law. And fit-all only seeks to add to this unfair and unreasonable and unjust burden on consumers. We must put a stop to fit-all and its terrible effects on the Filipino consumers.?
Laban Konsyumer Inc. (LKI) is a nonprofit and non-stock registered entity with the Securities and Exchange Commission. LKI is a consumer advocacy group in the Philippines that promotes consumer education and protection against deceptive, unfair and unconscionable business practices. The LKI focuses on education, prices and supply of basic and prime commodities, standards and qualities among other areas of consumer protection.
LKI is a new member of Consumers International, a membership organization for consumer groups around the world. Consumer International is composed of over 200 member organizations in more than 100 countries to empower and champion the rights of consumers everywhere. Dimagiba also acts as Chairman of the International Organization for Standardization (ISO) Consumer Policy Committee (COPOLCO) of the Philippines.
For any inquiries or concerns, you may reach LKI President Vic Dimagiba at 0917-812-5546