LKI 2020-043 PRESS STATEMENT
LABAN KONSYUMER ASKS TO ERC: FEED IN TARIFF SHOULD GO DOWN INSTEAD OF INCREASING
Consumer Group Laban Konsyumer Inc. (LKI) recently made a public statement addressed to the Energy Regulatory Commission (ERC) saying that “during this time of pandemic when many of us consumers are financially challenged, we believe that the Feed In Tariff should go down instead of increasing. The original rules themselves state that FIT should degress over a period of time. But if FIT continues to rise, this will be to the detriment of the Filipino consumer welfare.”
LKI President Atty. Vic Dimagiba pointed out that “there is supposed to be degression for new entrants, i.e., if you join the program at a later year, you get a lower starting FIT. This was supposed to incetivize speedy renewable energy development. After the degressed rate, however, the rate will still be adjusted upwards each year. This is a dangerous trend for the consumer, especially if it continues to go up during the lockdown and quarantine phases of our country during the long and ongoing pandemic. ”
LKI highlighted “The original FITs for wind were bacth 1 (1st 200 MW)- P8.53/kwh and batch 2 (next 200 MW)-P7.40/kwh.
Vietnam FIT is 8.5-USc/kwh or around P4.25/kwh at an exchange rate of 50 pesos to a dollar.
We checked how much it is in the Philippines, as it is in the recent FIT resolution that ERC issued recently . Why would Vietnam consumers pay P4.25 and Philippine consumers not only pay more, but at an increasing rate.”
This comes at the heels of the recent news that “Ayala’s AC Energy Inc. is building up renewable energy investment portfolio in the Vietnamese market with its greenfield 210-megawatt Quang Binh wind farm project. The Ayala firm said the installation, which it will be undertaking as a joint venture with AMI Renewables, will be the largest that shall ever be developed in the Vietnam energy market on such technology type”.
LABAN KONSYUMER INC. actually recently called out ERC for increasing FIT charges. Consumer Group Laban Konsyumer Inc. (LKI) recently stated that “suspiciously, while many, individuals, parties and even representatives, including the Energy Regulatory Commission (ERC) themselves were attending and speaking at the latest Senate Hearing on Energy, the regulator decided to release a resolution increasing the Feed In Tarriff .”
The group highlighted how “This FIT, is the rate that TransCo will pay the FIT-eligible generation companies. So, TransCo’s payments to generation companies will go up, apart from the back billings the generation company will charge for the past 5 years . In turn, TransCo will turn around and ask ERC for a higher FIT-Allowance, to fund the additional FIT, and which shall be passed on to the consumers for the rest of the balance of 20 year period”.
LKI President Atty. Vic Dimagiba complained that “This may lead to a higher FIT-All to fund the additional payments to FIT eligible generation companies. For the solar batch 1, the FIT went up from P9.68/kwh in 2015 to P11.2758/kwh in 2020. For wind batch 1, the FIT was increased from P8.53/kwh in 2015 to P9.8976/kwh in 2020. These are significant increases, any way you look at them. And this will definitely have an impact on the final rates that consumers have to pay because it will surely be passed on to our detriment. This was all indicated in the resolution approving the adjustment to the Feed In Tarriff.”
LKI explained that what worries the group is that “at the end of the day if these FIT rates continue to go up, this will only mean that consumers will be charged more, having more to pay for their electricity bills. This seems to be terrible timing, considering that our country is still trying to survive this current pandemic, lockdown and global crisis. We believe there should be a hearing on this first before we increase the rates. These are too many rate increases being forced upon the consumer by ERC.
In fact, this is also coming on the heels of the ERC Order favoring the three (3) PSA San Miguel power plants retroactive to December 2019, but ERC should look into and ask San Miguel if backbilling can be amortized going forward, to minimize rate impact.
We at LKI also ask government to look and inspect these ERC orders that are favoring the San Miguel plants and will lead to higher rates for our poor consumers still suffering under the coronavirus pandemic. Generation charge is the biggest component of the electricity bill, and the largest rate that customers have to pay for, and these three (3) PSA San Miguel plants will add their higher rates during this GCQ. We hope all these rate increases can be looked into, and we hope that they can be prevented for the time being. We cannot afford another perfect storm.”
Dimagiba concluded “People are losing jobs, and do not have the means to pay for higher electricity rates, and these are FIT-All rates if ever… a cost that we do not even kow if we are enjoying the power that we are paying for with these costs. The resolution was also released when a Senate Hearing was going on, so this all appears very strategic in our eyes. Perhaps government should also look into these moves by the regulator, increasing FIT costs. We are trying to protect consumer welfare here, and ensure that consumers are paying fair rates.”