ERC: Expect uniform but higher renewable energy rates

Consumers of renewable energy will have to pay a uniform rate for their electricity consumption following the release of the Feed-In Tariff Allowance (FIT-All) rules that seek to attract more investors and develop the industry. But with the tariff subject to digression, consumers will have to pay higher during the initial years of the project, with prices slowly coming down after several years "to encourage developers to invest at the initial stage and hasten the deployment of renewable energy," the Energy Regulatory Commission (ERC) said. According to the ERC, which released the rules, electricity users are "obliged" to pay a uniform rate per kilowatt hour - referred to as the FIT-All. It said FIT-All will be collected and placed in a fund to be administered by National Grid Corporation of the Philippines, which is mandated to connect with and take in the energy generated from renewable energy power plants. "Whenever there is renewable energy injected into their systems, National Grid or the utilities, in the case of embedded plants, allocate the energy among all their customers or electricity end users," ERC executive director Francis Saturnino Juan said. The FIT-All will be included in the transmission billing statement as a separate item. National Grid will use the fund to pay the renewable energy developers. ERC hopes the FIT rules will facilitate more investments in the energy sector. "With this in place, we anticipate that renewable energy projects will become bankable, as these projects' future cash flows are not only made easily determinable, but are also fixed and assured," Juan said. The rules removed another barrier to development of renewable energy projects "without burdening the electricity consumers with an unreasonable rate imposition," he said. The FIT system, one of the incentive mechanisms under the Renewable Energy Act of 2008, serves to guarantee payments over a period of time so that developers of wind, solar, run-of-river hydro, biomass, and ocean energy are assured of returns on their investments. "National Grid shall periodically file with the ERC for the setting of the FIT-All, which shall take into account, among others, the predicted required revenues for the projected deliveries of the RE plants, the applicable FITs and the National Grid's administration cost," the regulator said. ERC said payments to developers are based on actual deliveries to the system and the applicable FIT based on the technology they are using. —KBK/VS, GMANews.TV