CONSUMER GROUP PLEADS ZERO ADJUSTMENT OF FEED IN TARIFF ALLOWANCE ERC

2019-01-24 23:47:12

Laban Konsyumer Inc. and its President Atty. Victorio Mario A. Dimagiba reported its filing to the Energy Regulatory Commission on Monday , January 21, 2018 and pleaded zero adjustments regarding pending applications for increases in the Feed-in Tariff allowance that are billed to all consumers.


Under current law and policy, the FIT ALL remains a burden in a fixed amount to be paid by the consumers for 20 years . 

Dimagiba said that “It will show the Commissions’ resolve and leadership to consider the 2018 FIT ALL rate of 0.2932 /kwh application moot and abandoned, in view of the lower 0.2780 /kwh 2019 FIT RATE applied. It makes no logic to approve a higher FIT All and then reduce the rate for the current year”. 


LKI wrote “In the cross examination of Ms. Dizon on November 26, 2018, she testified that as of July 2018 the FIT Rate had gone down to 0.2655 /kwh from the amount applied of 0.2780/kwh (p 17 TSN , November 26, 2018 ). On 21 September 2018, during the expository presentation by Transco of its 2019 FIT-All application for approval with the ERC, a clarificatory question posed upon Transco revealed that estimates and assumptions used for the present 2019 FIT-All application was the latest approved 2017 FIT-All rate (starting billing month of June 2018) of 25.63-c/kWh.” 


Dimagiba argued “However, if Transco’s 2018 FIT-All application for approval with the ERC with the higher rate of 29.32-c/kWh is approved (which is still pending up to the present time without even a Provisional Authority issued), then the estimates and assumptions used for the present 2019 FIT-All application are all wrong and Transco should have used the said rate, 29.32-c/kWh, instead of 25.63-c/kWh“ 


The group believed that “Considering that the estimates and assumptions used for the present 2019 FIT-All application used the latest approved 2017 FIT-All rate of 25.63-c/kWh and that the present 2019 FIT-All application even asked for a lower rate of 26.55-c/kWh, then the 2018 FIT-All application of Transco should be considered moot or deemed abandoned with Transco’s filing of the present 2019 FIT-All application.” 


Otherwise, a situation arises where the ERC issues a Provisional Authority or Decision on the present 2019 FIT-All application for a lower rate 26.55-c/kWh and then subsequently releases a Decision on the 2018 FIT-All application for a higher rate of 29.32 c/kWh. Considering the substantially higher rate of 2018 FIT-All, the consumers should be protected and the 2018 FIT-All application should be deemed moot and abandoned. 


Secondly, In filings of the Memorandum of Laban Konsyumer Inc. in ERC Case No. 2018-085 , LKI stated that “The FIT all rate applied for should exclude inflation in the absence of current guidelines of the Commission on inflation for FIT ALL, while Transco added inflation since 2016. 


Dimagiba expounded on this by explaining that “According to the FIT Rules (ERC Resolution No. 16, Series of 2010), the FIT Rates are subject to escalation for local inflation and foreign exchange (FOREX) rate variations. The FIT Rules provided a formula for the adjustment, but it also stated that the ERC will be the one to publish the adjusted FIT Rates that will then be used by Transco in the calculation of the FIT-All. However, the ERC has never published any adjusted FIT rates since the filing of the second FIT-All Rate Application (ERC Case No. 2015-216 RC). And, in the absence of any issuance of ERC on that matter, Transco has been making its own computation of the escalations and using these adjusted FIT Rates to calculate the FIT-All Rates. In fact, recent decisions rendered by the ERC did not allow any adjustments or escalation, or at the least, only allowed the adjustment of O&M using the CPI formula provided by the Commission.” 


Dimagiba highlighted “The removal of escalation for the FIT Rates is equivalent to savings to the consumers of around Php7.5 Billion (FIT Payments from 2016-2019). A simulation based on the data provided by Transco in its application shows that the effect of escalation is significant and the additional FIT payments will continue to increase until the 20th year, as the FIT payments are guaranteed for 20 years.” 


In closing, as the third main point of the consumer group, it was written that “The LKI interposes no objection on the adjustment of the FIT RATE by the Commission for as long as it will result to a reduction of the FIT Rate in an amount lower that the amount applied by the applicant and is supportive of consumer welfare.” 


Dimagiba continued that the formula and supporting statistics in the computation for the Feed in Tariff Allowance is too complicated and difficult to understand so much so as it defeats the right to know of the consumers. The Intervenor proposes to the Honorable Commission to revise and modify the formula. Only the applied incremental increase for the period should be the content of the Application.” 


LKI had pending petitions in the Commission and remains unresolved to invalidate an approximate amount of Php 0.15 /kwh of FIT All granted for calendar years 2016 to 2017 . 

LKI is a member of Consumers International and applied for recognition as a national consumer organization with the Department of Trade and Industry. 

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