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FIT strikes again

AS WE bid the sweltering summer months goodbye, there is certainly relief in welcoming a cooler, if often rainier, weather. For consumers, there is relief too in the form of lower power rates in June.

Meralco announced this week a fresh round of power rate cuts, this time by P0.1252 per kilowatt-hour (kwh) due to lower generation and transmission charges. The adjustment is seen to bring down the overall rate to P9.8789 per kwh from P10.0041 per kwh last month. This translates to a decrease of some P25 for residential customers consuming 200 kwh to up to P62.60 for those consuming 500 kwh.

In particular, Meralco said the June cut was largely due to lower Power Supply Agreements cost, which in turn was attributed to higher capacity from plants in Pagbilao and Ilijan, both of which returned to normal operations following their respective scheduled maintenance. A P0.0861 decrease in transmission charge to residential customers by the National Grid Corporation of the Philippines also contributed to the decrease.

This means that in two months, many Meralco customers have seen their electricity bills decrease by more than P130. Broadly speaking, this news is critical for two things: First, it continues a two-month downward trend for power rates despite the traditionally high-demand summer months; secondly, it bucks a yearshigh inflation rate attributed to the implementation of the Tax Reform for Acceleration and Inclusion Law among a host of external factors, like higher oil prices.

That being said, the P0.1252-per-kwh reduction could in fact have been higher. Though, every single component in the monthly bill decreased, such reductions were tempered by the latest increase in the Feed-In Tariff Allowance (FIT-All), a uniform charge added to everyone's power bills to help subsidize renewable energy developers. It represents part of a larger scheme to attract investments in cleaner energy but for wind and solar, still expensive and cannot be relied on as a baseload power supply.

For June, the Energy Regulatory Commission approved a P0.0733-perkwh increase in FIT-All, bringing the rate to P0.2563 per kwh.

Understandably, consumer groups were quick to question the wisdom in the approved hike, crying foul because the ERC granted a higher FIT-All rate of P0.2563/ kwh despite the applicant National Transmission Corp.'s prayer for the approval of a lower FIT-All rate of P0.2291/kwh, calling it an act of grave abuse of discretion tantamount to lack or excess of jurisdiction.

Consumer advocacy group CitizenWatch expressed objection, citing that the manner in which the decision was determined was irregular and that consumers were deprived of due process. "If not for the higher FIT charges,

consumers could have enjoyed a bigger overall decrease but instead was slapped with a 7 centavo KWH increase," said CitizenWatch Convenor, lawyer Hannah Viola.

Laban Konsyumer Inc., through lawyer and former Department of Trade and Industry undersecretary Victorio Mario Dimagiba, asked ERC to reconsider the FIT-All increase, arguing that it "violates the basic and cardinal principle of the first rights guaranteed in our Bill of Rights of the 1987 Constitution, mandating, 'No person shall be deprived of life, liberty, or property without due process of law,'" the group said in a statement.

"What Laban Konsyumer finds erroneous is the manner by which this Honorable Commission disregarded its own pronouncements of protecting the consumers from rate applications that fail to comply with due process requirements and then, itself violating the said due process requirements that it espoused when it issued the assailed decision."

It is also important to note that Meralco, as a power distributor, does not earn from either pass-through charge, such as generation and transmission charges, or taxes and other public policy charges like the FIT-All rate, which are directly remitted to government coffers.

And so, while the incentive given to investments in renewable energy might seem laudable as a policy, for an ordinary consumer, its benefits seem amorphous at best. It's even been described by the Federation for Economic Freedom as illogical, arbitrary, and ultimately unjust. It is neither Meralco nor the government that benefits from increased FIT-All rates, which is the lone downer to the backto-back cut in electricity rates.

Consumers are already feeling the pain from the combined impact of rising fuel costs and basic commodities. This means that every saved peso could bring relief, especially for the D and E segments of society.

Government has defended TRAIN and parried the unanticipated inflationary backlash to many external factors, but any policy that will cause unnecessary burden to the masses should be stopped.

In these trying times, all Filipinos deserve a better level of sensitivity

Topics: FIT strikes again , Orlando Oxales

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