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Consumers face prospect of power rate increase in August
By DANESSA O. RIVERA, GMA News
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(Updated 6:49 p.m.) Consumers are facing the prospect of paying higher electricity bills as early as next month or once the Energy Regulatory Commission (ERC) gives state-owned National Transmission Corporation (TransCo) a provisional authority to increase power rates by P0.04 per kilowatt hour, executive director Francis Saturnino Juan told GMA News Online by phone.
"With the prayer for provisional authority, the ERC could allow the implementation of a rate hike to be reflected on the FIT [Feed-In Tariff] allowance while the case is being heard," ERC executive director Francis Saturnino Juan told GMA News Online by phone.
"But this will have to be evaluated first by the ERC," Juan said, noting the higher rates will be applied to all grid customers in Luzon, Visayas and Mindanao.
"With the prayer for provisional authority, the ERC could allow the implementation of a rate hike to be reflected on the FIT [Feed-In Tariff] allowance while the case is being heard," ERC executive director Francis Saturnino Juan told GMA News Online by phone.
"But this will have to be evaluated first by the ERC," Juan said, noting the higher rates will be applied to all grid customers in Luzon, Visayas and Mindanao.
The provisional authority gives TransCo the power to enforce a rate adjustment while the petition is still being heard by the ERC.
Proceeds from FIT will fund the development of renewable energy sources, including wind, solar, biomass and hydropower projects. TransCo is the designated administrator of the FIT Allowance Fund for FIT-eligible renewable energy projects.
Proceeds from FIT will fund the development of renewable energy sources, including wind, solar, biomass and hydropower projects. TransCo is the designated administrator of the FIT Allowance Fund for FIT-eligible renewable energy projects.
ERC has yet to receive the TransCo application for a rate adjustment, Juan said. "They said it will be filed today but as of noon, wala pa," he added.
The petition for higher rates is part of the implementation of the Renewable Energy Law promulgated in 2008, TransCo FIT All team head Dina Dizon told GMA News Online in a separate phone interview.
"This is the first time we asked for a rate hike from ERC after the guidelines for FIT All was released in February 2014," she said.
"This will be used to provide incentives to generation companies of RE," she added.
The implementation of the Renewable Energy Law is expected to provide the country with the use of clean energy.
Based on the petition published in newspapers, TransCo is asking for a rate hike and a prayer for provisional authority, Juan noted.
TransCo is a government agency created under Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001. It operated and managed the power transmission system that links power plants to the electric distribution utilities nationwide.
After a public bidding in December 2007, the TransCo concession was awarded to the Sy-led National Grid Corporation of the Philippines (NGCP). NGCP eventually secured a congressional franchise to operate the transmission network through Republic Act No. 9511.
In a separate report, GMA News' "News to Go" noted that once TransCo gets the green light from ERC, the rate adjustment will appear on electricity bills as FIT.
Investments in renewable energy
FIT was approved as an incentive mechanism to "attract new investments in renewable energy" in 2012. It was defined by Energy Matter as "a premium rate paid for electricity fed back into the electricity grid from a designated renewable electricity generation source like a rooftop solar panel system or wind turbine."
FIT was approved as an incentive mechanism to "attract new investments in renewable energy" in 2012. It was defined by Energy Matter as "a premium rate paid for electricity fed back into the electricity grid from a designated renewable electricity generation source like a rooftop solar panel system or wind turbine."
ERC then approved rates of P5.90 kWh for hyrdro, P6.63 per kWh for biomass, P8.53 for wind and P9.68 for solar. Rates for ocean thermal energy were not approved, as it was still under study.
Universal Robina Corp. last March announced plans to diversify by building a P2.52-billion bagasse-fired power plant in Negros Occidental, which it predicts will reduce the use of fossil fuel and create jobs in the area.
Sugarcane by-product bagasse from its sugar mill in Kabangkalan, Negros Occidental will power the plant, which is expected to start operating in August. The project was signed under URC's 25-year operating contract with Department of Energy on biomass renewable energy.
Last week Energy Secretary Carlos Jericho Petilla warned of a power crisis by 2015 as the demand exceeds the supply from existing power plants. He added the crisis may call for 20 days of rotating brownouts if bold steps – such as declaring a state of national emergency – are not taken by the government.
ERC also announced this month the Manila Electric Company is raising its power rate after the shutdown of several power plants forced the company to buy more expensive electricity.
However, a secondary price cap on electricity traded in the Wholesale Electricity Spot Market (WESM) is expected to cushion the impact of a rate increase on consumers.
The price cap of P6.245/kWh will be implemented if WESM prices reach P8.186/kWh for over 72 hours or three consecutive days. – Rie Takumi/Joel Locsin/LBG/VS/KG, GMA News Online
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