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FIT to hike power rates soon

The electricity bill of a typical household with power consumption of 200 kilowatt-hours a month will increase by P24.80 in April, after the government approved the collection of feed-in-tariff allowance for renewable energy projects.

The Energy Regulatory Commission provisionally approved the application of the National Transmission Corp. to collect a feed-in tariff allowance of P0.1240 per kilowatt-hour from power consumers this year. TransCo was designated as the FIT-All fund administrator, on behalf of renewable energy producers.

“The commission already approved the FIT-All and the order is now being finalized for the signature of the members of the commission,” ERC chairman Jose Vicente Salazar said.

“We provisionally approved the amount of P0.1240 per kWh,” he said.

This means a residential consumer, with a monthly electricity consumption of 200 kWh, will pay P24.80 more by April or at the start of the FIT-All collection.

The feed-in tariff allowance refers to the uniform charge billed on power consumers, to reflect the higher rates enjoyed by completed renewable energy projects, such as solar, wind and biomass facilities.

The 2016 feed-in tariff allowance will be used to pay renewable energy projects amounting to P6.925 billion, with the bulk going to wind projects at P2.788 billion, solar at P2.591 billion, biomass at P1.263 billion and hydro at P282.516 million.

TransCo predicted wind projects in 2016 would be able to generate 977,205 megawatt-hours, followed by biomass at 682,407 MWh, solar at 632,686 MWh and hydro at 187,342 MWh.

The government allowed the installation of 500 MW of solar power  projects, 400 MW of wind power projects, 250 MW of hydro and 250 MW of biomass projects.

ERC approved a feed-in tariff rate of P6.63 per kWh for biomass,  P5.90 per kWh for hydro, P9.68 per kWh for first phase of solar, P8.69 for second phase of solar, P8.53 per kWh for first phase of wind and P7.40 per KWh for second phase of wind.

TransCo sought the regulators’ approval in December collect a FIT-All of P0.1025 per kWh from consumers starting this year, but the ERC approved a higher rate based on certain assumptions.

“We assessed the list of the existing FIT COCs [certificate of compliance] and those gencos [power generation companies] with pending FIT COC applications which are the most certain to become operational before the March 15 deadline. The list totaled 1,054 MW. Using this capacity, we computed the FIT-All to be P0.1240 per kWh,” Salazar said.

TransCo, in a filing to the regulator, said that pending the hearing on the merits of the present application, a provisional authority should be issued to collect the feed-in tariff allowance starting January.

It shall be set by the ERC on an annual basis, taking into account the forecast annual required revenue of the eligible renewable energy plants, previous year’s under or over recoveries, administration costs, forecasted annual electricity sales and other factors.

TransCo also asked ERC that after due notice and hearing, a permanent approval be granted to implant the FIT-All rate for 2016 of P0.1025 per kWh, “computed for RE project with at least nomination from DOE for eligibility under the FIT system.” it said.

The agency said it sought a lower feed-in tariff allowance from the computed level of P0.1470 per kWh  in view of the ERC’s decision limiting the forecast renewable energy generation included in the computation to those renewable energy plants with certificates of endorsement.

“The computed 2016 FIT-All  rate covering RE projects with at least 80 percent electromechanical completion, thus are almost sure to operate within the period under consideration, if not already operating to date,” it said.

TransCo also included in the 2016 computation the under-recoveries for 2015 estimated at P0.0268 per Kwh.

The passage of the Renewable Energy Law of 2008 which provided for the feed-in tariff regime  ushered in the entry of renewable energy projects.

Topics: feed-in-tariff , FIT , power rates , Energy Regulatory Commission , ERC , National Transmission Corp
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