Lki meets Erc Chairperson on Fit All

LKI Press Statement October 23, 2018

LABAN Konsyumer Inc. visits ERC Chair Agnes Devanadera to push swift action on FIT-All charge and its heavy burden on consumers

Laban Konsyumer Inc. President Atty. Victorio Mario A. Dimagiba, met with Energy Regulatory Commission (ERC) Chair Agnes Devanadera on Mondayb, October 22, to push once again for immediate action to be taken against the Feed-In-Tariff Allowance being charged to consumers’ electric bills and thus burdening consumers with high prices.

The group explained the urgency of the issue, saying “FIT-All is collected from electric consumers nationwide and is used to subsidize payments to select RE developers. But what is alarming though is that FIT-All has increased more than sixfold from 4-c/kWh in 2015 to 25-c/kWh starting June 2018. There are even pending petitions to further increase this to as much as 29-c/kWh. We met with ERC to put a stop to this unjust and overpriced component of consumers’ electricity bills.”

Dimagiba reiterated to Chair Devanadera his recent concerns regarding Fit-All in the past months, pointing out that “the FIT-All Rate Petitions are the only cases where the Commission grants a rate that is higher than what was asked by the Petitioners. In fact, the FIT rates granted to developers have been shown to be far too expensive. For example, the solar rates signed by electric distributors with developers, as submitted to the ERC for approval, are cheaper than the FIT rates that consumers nationwide will subsidize for 20 years.”

In their discussion with Chair Devanadera, LKI also touched on overpayment to Fit-eligible renewable energy plants. Dimagiba said “during the hearings for the 2018 FIT-All Rate, LKI observed that TransCo presented inconsistent capacities for some RE plants. LKI also pointed out that these higher capacities may have been used by TransCo as the basis for payments to these RE Plants. This means TransCo may have OVERPAID these FIT-Eligible RE Plants and that the computed FIT-All is higher than necessary. This observation was confirmed when the ERC issued an Order on June 11, 2018, where the ERC determined that TransCo OVERPAID certain FIT-eligible generators by P36.5 million. It would be unfair and unjust to pass on this overpayment to consumers and their electricity bills.”

Dimagiba added “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 comical 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 end-users should be protected and the 2018 FIT-All application should be deemed moot and abandoned.”

Dimagiba concluded that “Fit-All is also an inflation issue, and thus a consumer welfare issue. Meralco has been reporting that 2018 power prices have been lower than they were in 2012, with only the Universal Charge and Fit-All showing increases. This is where the Chair can help government temper inflation. By considering Fit-All as a burden to consumers, the Chair can finally rectify and undo mistakes of the government in the past.”

In the past months, Dimagiba and LKI have been actively advocating against Fit-All, TRAIN law, and inflation, calling for government to act immediately and relieve consumers of the heavy burden of soaring prices. On the topic of escalation of the FIT rates for FOREX and inflation, the group stated that 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, thus putting no end to Fit-All’s burden on consumers. Thus, the group firmly believes that acting on Fit-All and relieving consumers immediately of this burden must be a top priority of the government and regulator.

Laban Konsyumer Inc. (LKI) is a nonprofit and non-stock registered entity with the Securities and Exchange Commission. LKI is a consumer advocacy group in the Philippines that promotes consumer education and protection against deceptive, unfair and unconscionable business practices. The LKI focuses on education, prices and supply of basic and prime commodities, standards and qualities among other areas of consumer protection.

LKI is a new member of Consumers International, a membership organization for consumer groups around the world. Consumer International is composed of over 200 member organizations in more than 100 countries to empower and champion the rights of consumers everywhere. Dimagiba also acts as Chairman of the International Organization for Standardization (ISO) Consumer Policy Committee (COPOLCO) of the Philippines.

For any inquiries or concerns, you may reach LKI President Vic Dimagiba at 0917-812-5546

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