Filipino consumers will have both good and bad news in the coming year. Phone call charges are expected to drop in 2017, while electricity rates are certain to climb amid the increased usage of renewable sources of energy.
The National Telecommunications Commission recently issued Memorandum Circular No. 09-11-2016 on interconnection charge for voice service, advising Globe Telecom Inc. and PLDT Inc. to cap their interconnection charges at P2.50 per minute.
With the average cost of a mobile voice call per minute at P6.50, retail rates for voice calls are expected to be reduced by a minimum of P1 per minute, according to NTC calculations. Globe and PLDT, in response to the memorandum circular, signed a memorandum of understanding that would effectively carry out the reduced interconnection rates by January 1, 2017.
The move to lower the current charges is a welcome relief for budget-conscious Filipinos to whom every centavo counts. If the new rates translate into a 38 percent to 40 percent drop in interconnection charges, as what the NTC claimed, mobile users are expected to gain much relief from the government’s effort.
The NTC directive is expected to benefit a big segment of the population—a lot of mobile phone users in the country still do not use smartphones (48 percent of users still use ordinary cellphones), while others are still not connected to the internet.
The newly-established Department of Information and Communications Technology, through the NTC, must be credited for finally pinning down the telecom duopoly to the agreement. The government finally heard the complaints of the consumers.
Opposite direction
Electricity rates, meanwhile, are headed to a different direction. State-controlled National Transmission Corp. has filed a petition with the Energy Regulatory Commission for a feed-in tariff allowance, or the per kilowatt-hour rate charged to consumers for the use of renewable energy, amounting to P0.2291 per kilowatt-hour starting in 2017.
The TranscoCo move has prompted Manila Electric Co. to consider filing an “intervention” pleading with the ERC.
TransCo is currently collecting P0.1240 per kWh from consumers under the FIT-Allowance line item in the power bills. The rate will be increased to P0.2291 per kWh, if ERC approves the petition of TransCo. The amount represents the payment to eligible renewable energy developers totaling P16.488 billion, including the so-called under-recoveries in 2016.
TransCo also asked ERC to make the approval of the rate permanent, “or in the alternative, such other amount as may be found by the Commission to be consistent with the FIT-All guidelines and on the basis of new and updated information not heretofore available to the applicant at the time of the present application.”
TrnasCo’s petition essentially seeks to “refund” renewable energy companies, which have put up power plants that feed on non-conventional fuels, such as hydro, wind, solar and bagasse
TransCo based its petition on the most updated list of renewable energy projects that are projected to be eligible under the feed-in tariff system from 2014 to 2018, as provided by the Energy Department. The company also tapped its own database containing historical information and the available submission of the developers on actual or forecast generation. It said the department’s list provided the best estimate of the timing of the operation of the renewable energy plants.
TransCo limited the determination of the 2017 FIT-All rate to include eligible capacities up to the installation targets set by the department, namely 500 megawatts for solar, 400 MW for wind, 250 MW for hydro and 250 MW for biomass.
The company included projects that reached at least 80 percent electromechanical completion, which meant they were certain to operate within the period under consideration.
Cusi takes note
The looming increase in power rates stemming from the FIT has already caught the attention of Energy Secretary Alfonso Cusi.
The new energy chief is no longer inclined to a third round of feed-in tariff to ease the burden of consumers from high electricity rates.
“As long as I don’t violate anything, I will put a stop to it,” says Cusi, adding he is not endorsing the third round of installation targets sought by the National Renewable Energy Board during the previous administration.
The previous NREB board asked for an additional installation target of 500 megawatts for wind and another 500 MW for solar.
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