Manufacturers have asked the Supreme Court to stop state agencies from enforcing new rules that require consumers to pay in advance for the purchase of power from renewable energy even before consumers can use the electricity.
They said in a 21-page petition that the “Feed-In Tariff Rules and Guidelines mandate the advance collection of “FIT Allowance” from electricity consumers.
The petition was filed by the Federation of Philippine Industries, Inc. through its chairman Jesus L. Arranza.
It also asked the SC for a temporary restraining order to stop the Energy Regulatory Commission, National Transmission Corporation (Transco), National Renewable Energy Board (NREB) and Manila Electric Company (Meralco) from collecting from electric consumers the FIT-ALL rate of P0.0406 per kilowatt-hour (kWh) supposedly effective in January this year.
After giving due course, the FPI also wanted to declare as unconstitutional the FIT Rules and Guidelines insofar as they implement the FIT-All of P0.0406 per kWh, as well as the ERC Order dated October 7, 2014 granting the Transco’s application, provisionally approving such FIT-All rate.
“Indeed, only this Honorable Court can protect the consuming public from imminent wrongful extraction of funds by the government,” the petitioner said.
Republic Act No. 9513 or the Renewable Energy Act (RE Law), which was signed into law in December 2008, mandates the ERC in consultation with the NREB to formulate and promulgate feed-in tariff system rules, which include among others the priority connection to the grid for electricity generated from emerging renewable energy resources, purchase and transmission of and payment for such electricity by the grid system operators, determine the fixed tariff to be paid to electricity produced from each type of emerging renewable energy and the feed-in tariff to be set shall be applied to the renewable energy to be used in compliance with the renewable portfolio standard as provided for by RE law.
The ERC then issued Resolution No. 16 Series of 2010, adopting the Feed-In Tariff Rules. Subsequently, the ERC issued Resolution No. 10 Series of 2012 on July 27, 2012, approving the Feed-In Tariff Rates.
Thereafter, the ERC issued Resolution No. 24 Series of 2013 on December 16, 2013, adopting the guidelines and the collection of the Feed-In Tariff Allowance and the disbursement of the Fit-All Fund.
On July 30, 2014, Transco filed an application for the approval of the Feed-In Tariff Allowance for 2014 and 2015 with the ERC, which the regulatory body granted and provisionally approved the Feed-In Tariff Allowance of P0.0406/kWh, which is supposedly effective in January this year.
Last December 19, 2014, lawyer Remigio Michael Ancheta filed a petition with the SC seeking to nullify the ERC’s approval of the FIT-All rate for being violative of laws because it bills consumers payment for power that has yet to be generated and consumed.
Ancheta argued that the erroneous advance collection amounts to P2.7 billion or P230 million monthly for 2015. For a regular residential customer, this means an additional P8.12 monthly.
“Manufacturers realized that if the assailed order, rules and guidelines are not struck down, Transco through Meralco would be able to collect additional amount P0.0406/kWh from the consuming public. Upon further inquiry and investigation, manufacturers were made aware that such payment is for goods that are yet to exist. In fact, the funds to be collected are meant to pay for electricity not yet produced by RE plants not yet constructed,” the petitioners lamented.
“The effects of this kind of collection would cause great damage and prejudices to the manufacturers, which use electricity in its business, and consequently be prejudicial to the public, as well,” the FPI executive said, adding “the assailed order, rules and guidelines would adversely affect manufacturers finances and ultimately their right to protect their property from wrongful extraction of the government.”
These reasons, according to FPI, have prompted them to file a petition-in-intervention in the case initiated by Ancheta, who earlier questioned the validity of the FIT Rules and Guidelines as well as the orders of ERC approving the FIT Allowance.