Push for green energy may cost consumers
JOSE BIMBO F. SANTOS, BusinessWorld
01/21/2010 | 09:02 AM
Consumers should brace for higher electricity bills as the Energy Regulatory Commission (ERC) considers adding a charge aimed at encouraging renewable energy projects.
Under a draft rule released on Wednesday regarding the feed-in tariff system, a renewable energy charge will be an additional component in electric bills.
The fee will be borne by all customers whether or not the utility they use is getting power from renewable sources.
This, ERC Executive Director Francis Saturnino Juan said in a telephone interview, is because "the benefits of renewable energy development, like reduced pollution, will be felt by everyone so everyone will share the burden."
"All qualified renewable energy developers shall be entitled to the appropriate feed-in tariffs... and [these] shall be paid by all electricity consumers through a renewable energy charge that shall be levied on them to be established and periodically adjusted by the ERC," the draft rules states.
The tariff will be specific for each renewable energy technology.
"The renewable energy charge shall take into account the forecasted annual required revenues for the projected deliveries of the qualified renewable energy producers, the applicable feed-in tariff for the year, the previous year's over or under-recoveries, and such other relevant factors," the ERC said.
Section 7 of Republic Act 9513 or the Renewable Energy Act of 2008 provides for the establishment of the feed-in tariff system.
"To accelerate the development of emerging renewable energy resources, a feed-in tariff system for electricity produced from wind, solar, ocean, run-of-river hydropower and biomass is hereby mandated," the section states.
The law tasks the ERC, in consultation with the National Renewable Energy Board, to formulate and promulgate the rules for the feed-in tariff system a year after the passage of the Renewable Energy law.
Aside from setting a fixed tariff for 15 years, the scheme mandates priority connections to the grid for electricity generated from renewable energy sources such as wind, solar, ocean, run-of-river hydropower and biomass power plants.
The National Grid Corporation of the Philippines (NGCP) will administer the renewable energy charge fund to qualified plants.
"There will be an entity that will administer the fund, and we thought [there is] no one better than the NGCP since they have information on the metering and they are the operator of the country's grid," Juan said.
Under the draft rules, the feed-in tariff will decline by 2 percent yearly. "This is on the assumption that over time the technology will mature," Juan said. "Also, we want to encourage developers to start as soon as possible by giving them higher incentives if they start early," he added.
Ivanna G. dela Peña, vice-president and utility economics head of Manila Electric Co., said different issues will come out during the public consultation "so it's good that the draft rules are now out."
But Pete Ilagan, president of the National Association of Electricity Consumers for Reform, begs to differ. "[The] government should be the one to shoulder this, why is it always the consumer?" Ilagan said in a phone interview.
"For the missionary electrification of the Napocor (National Power Corp.), consumers answer for it, as well as their debts not covered by privatization. All of it is paid by consumers. What is the government for?" he added.
The ERC has set a Feb. 19 deadline for the submission of comments. A series of public consultations will follow. — GMANews.TV
Under a draft rule released on Wednesday regarding the feed-in tariff system, a renewable energy charge will be an additional component in electric bills.
The fee will be borne by all customers whether or not the utility they use is getting power from renewable sources.
This, ERC Executive Director Francis Saturnino Juan said in a telephone interview, is because "the benefits of renewable energy development, like reduced pollution, will be felt by everyone so everyone will share the burden."
"All qualified renewable energy developers shall be entitled to the appropriate feed-in tariffs... and [these] shall be paid by all electricity consumers through a renewable energy charge that shall be levied on them to be established and periodically adjusted by the ERC," the draft rules states.
The tariff will be specific for each renewable energy technology.
"The renewable energy charge shall take into account the forecasted annual required revenues for the projected deliveries of the qualified renewable energy producers, the applicable feed-in tariff for the year, the previous year's over or under-recoveries, and such other relevant factors," the ERC said.
Section 7 of Republic Act 9513 or the Renewable Energy Act of 2008 provides for the establishment of the feed-in tariff system.
"To accelerate the development of emerging renewable energy resources, a feed-in tariff system for electricity produced from wind, solar, ocean, run-of-river hydropower and biomass is hereby mandated," the section states.
The law tasks the ERC, in consultation with the National Renewable Energy Board, to formulate and promulgate the rules for the feed-in tariff system a year after the passage of the Renewable Energy law.
Aside from setting a fixed tariff for 15 years, the scheme mandates priority connections to the grid for electricity generated from renewable energy sources such as wind, solar, ocean, run-of-river hydropower and biomass power plants.
The National Grid Corporation of the Philippines (NGCP) will administer the renewable energy charge fund to qualified plants.
"There will be an entity that will administer the fund, and we thought [there is] no one better than the NGCP since they have information on the metering and they are the operator of the country's grid," Juan said.
Under the draft rules, the feed-in tariff will decline by 2 percent yearly. "This is on the assumption that over time the technology will mature," Juan said. "Also, we want to encourage developers to start as soon as possible by giving them higher incentives if they start early," he added.
Ivanna G. dela Peña, vice-president and utility economics head of Manila Electric Co., said different issues will come out during the public consultation "so it's good that the draft rules are now out."
But Pete Ilagan, president of the National Association of Electricity Consumers for Reform, begs to differ. "[The] government should be the one to shoulder this, why is it always the consumer?" Ilagan said in a phone interview.
"For the missionary electrification of the Napocor (National Power Corp.), consumers answer for it, as well as their debts not covered by privatization. All of it is paid by consumers. What is the government for?" he added.
The ERC has set a Feb. 19 deadline for the submission of comments. A series of public consultations will follow. — GMANews.TV
