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ERC urged to further cut FiT-All

A consumer group claimed the Energy Regulatory Commission (ERC) could have further lowered the feed-in tariff allowance (FiT-All) used to subsidize renewable energy developers to save power consumers from being overcharged.

In a statement on Wednesday, Laban Konsyumer Inc. (LKI) said the FiT-All paid by all electricity consumers nationwide could be further decreased to P0.1875 per kilowatt-hour (kWh) from the approved P0.2226 per kWh.

Earlier, the ERC said it had authorized the National Transmission Corp. (TransCo) to collect a FiT-All amounting to P0.2226 per kilowatt-hour (kWh) for 2018. This translates to a P0.0337/kWh reduction from the current P0.2563/kWh. It would take effect in the next billing cycle from receipt of the decision, either in April or May.

Although the ERC has yet to release the official copy of its decision, LKI commended the agency for transforming into a “pro consumer welfare regulatory body.” But the group did not comment as to whether or not the ERC authorized a refund of P0.0337 per kWh for the previous year and in the next since consumers had already paid the higher amount of P0.2563 per kWh in 2018 and in the first three months of 2019.

Prior to the ERC’s announcement, LKI recently filed a petition to claim a rollback to P0.1875 per kWh. LKI President Victorio Mario Dimagiba said the updated data submitted by TransCo showed that at the current rate of P0.2563 per kWh, the state-run firm “practically paid the RE developers their FiT-All under recovery by the end of 2018.”

Dimagiba explained that the actual FiT differential balance is P122.7 million in December 2018, much lower than the actual FiT differential balance of P3.7 billion in May last year. “On a monthly basis, Transco paid the RE developers the sum of P504 million from June to December 2018,” he said.

Dimagiba argued that maintaining the current approved FiT-All rate of P0.2563 per kWh, it would show that TransCo would have been able to more than fully collect the remaining FiT All under recovery worth P122.7 million in one month..

He added that in the succeeding months, by using the approved FiT-All rate of P0.2563 per kWh, TransCo effectively over-collected P504 million a month from consumers from January to March this year.

To prevent this, Dimagiba said that TransCo’s re-computed FiT-ALL rate of P0.2471 per kWh should be thoroughly reevaluated and, in lieu thereof, the current approved rate of P0.2563 per kWh be further reduced by P0.0688 per kWh which is the calculated rate necessary to offset the state-led corporation’s P504 million over recovery, translating to a new rate of P0.1875 per kWh.

“The reduced under recoveries is a good indicator of TransCo management of the FiT collection and payment to RE suppliers. However, the FiT-All rate must not overcharge the consumers, even at the reduced amount of Php 0.227/kWh,” he said.