ERC starts hearings on 4¢ feed-in tariff

MANILA, Philippines - The Energy Regulatory Commission (ERC)  is set to start hearings on the feed-in tariff allowance (FIT-All) of four centavos per kilowatt-hour, which will be charged to all electricity consumers.

In a notice, the ERC said it has approved for hearing the petition of the National Transmission Co. (TransCo) seeking provisional authority to implement the FIT rate immediately.

The ERC, in its notice, scheduled the hearing on Sept. 30 with pre-trial briefing and expository explanations by TransCo scheduled in Mindanao and Visayas ahead of the Sept. 30 hearing.

The FIT-All will be charged to all electricity consumers, as part of government efforts to develop the renewable energy sector. 

It will be reflected as a separate line item in the electricity bills of consumers if approved.

“Finding the said application to be sufficient in form and in substance with the required fees having been paid, the same is hereby set for jurisdictional hearing, expository presentation and pre-trial conference,” the ERC said.

Among the critical components of the petition, which ERC would have to decide on is the 4-centavo per kwh tariff as well as the forecast annual payout for renewable energy companies for 2014, 2015 and 2016, based on the FIT-All petition.

Based on TransCo’s filing, the annual payout will be P1.78 billion for 2014, P8.5 billion for 2015 and P10.25 billion for 2016.

The annual payout is the projected amount of payables for renewable energy companies.

The so-called FIT-All will serve as an incentive to renewable energy investors to develop wind, solar, biomass and hydropower projects in the Philippines.

The government has been trying to attract investors into the renewable energy sector amid calls among environmental groups to develop cleaner sources of energy other than coal.

The filing of the FIT-All comes while the Philippines is grappling with a looming power crisis in 2015.

Energy Secretary Carlos Jericho Petilla has proposed the declaration of Section 71 of the Electric Power Industry Reform Act of 2001 (EPIRA), the power reform law.

This would allow the government to tap additional capacity of up to 500 megawatts next year to address the looming shortage.