New charges detract from mission to make RE affordable — advocacy group

THE ENERGY transition cannot come at the expense of consumers, who are being made to pay fees that cut the risk for renewable energy (RE) developers, according to Partners for Affordable and Reliable Energy (PARE).

“PARE supports the country’s shift to clean and renewable energy (RE), but these measures should move the Philippines toward a just, affordable, and participatory energy transition, not create new financial burdens for consumers,” PARE Chief Advocate Officer Nic Satur, Jr. told BusinessWorld.

The Energy Regulatory Commission (ERC) recently approved the application of the National Transmission Corp. (TransCo) to collect the green energy auction allowance (GEA-All).

The GEA-All rate of P0.0371 per kilowatt-hour will appear as a separate line item in the customers’ electricity bills starting January next year.

The amount will be charged to all on-grid electricity end-users to fund the incentives of new RE projects being awarded under the green energy auction system. This has been expected to generate P5.7 billion worth of payments.

GEA-All will support RE projects involving solar, wind, hydropower and integrated RE facilities with battery storage.

Winning RE projects are awarded 20-year power supply contracts, ensuring long-term, stable revenue for their power generation output.

Meanwhile, the ERC also approved another TransCo application for a feed-in tariff allowance (FIT-All) of P0.2011 per kilowatt-hour (kWh), a reduction from the P0.2073 per kWh currently being charged.

FIT-All is a uniform charge that has been long being paid by consumers to support emerging RE technologies.

Payments for GEA-All and FIT-All are administered by TransCo. As the administrator, TransCo is tasked with filing applications before the ERC to determine the annual rate.

“For us consumers, particularly low-income households and those in rural or missionary areas, any additional charge or hidden cost related to Green Energy Auctions, new transition funds, or compliance with transition targets can worsen already rising electricity prices and squeeze budgets at a time of increasing food, transport, and housing costs,” Mr. Satur said.

ERC Chairman and Chief Executive Officer Francis Saturnino C. Juanhas  said that the incentives are meant to support the entry of new capacity in the Wholesale Electricity Spot Market (WESM).

“With the additional capacity, it will reduce the quantity that needs to be competed over in the WESM. It effectively pushes the demand curve, so the resulting price at the WESM will go down,” he said. — Sheldon Joy Talavera