Department of Energy Undersecretary Wimpy Fuentebella said the DOE and the National Renewable Energy Board (NREB) is looking at foreign funding to soften the burden of feed-in-tariff (FIT) rates on consumers.
He said the problem with the FIT now is the costs being passed to the consumers and the DOE is planning to address this by looking at another source for the FIT.
“Secretary [Alfonso Cusi] emphasizes that if there’s anything that goes into the power bill of the consumers, we will scrutinize,” Fuentebella said.
He said the DOE is looking into foreign funding as this is also a part of the climate change commission of other countries.
Consumers currently pay P0.12 per kilowatt-hour (kWh) in FIT charges, and might increase depending on market forecasts as more power players are slated to come into the country asking for FIT allowances.
For a household consuming 200 kilowatts per month, this equates to an additional P24 pesos in their monthly bill.
Committee on Energy chairman Sherwin Gatchalian proposed charging higher FIT rates to heavy polluters, like steel fabrication plants, since renewable energy is meant to offset what these plants emit.
He asked if there was a mechanism in the law that would charge more to these companies so the burden does not get passed to ordinary households.
“Lots of simple families don’t understand the benefit of renewable energy to them. A lot of them don’t even understand why they are being charged P24 a month,” Gatchalian said.
NREB OIC Chairman Atty. Jose Layug Jr. said the challenge still remains for the Philippines, which has one of the highest electricity prices in the region. Because of this, putting in a carbon tax will add more burden to consumers.
“While we want to tax the polluters, at the end of the day, it’s a pass-on, so it’s a challenge,” he said.
“The DOE is looking at ways and means to reduce the burden to consumers. The FIT allowance increasing is a function of the Wholesale Electricity Spot Market (WESM) price versus the conventional fuel prices in the market,” Fuentebella said.
He added they are still waiting for WESM’s prices last year to assess its impact on the FIT rate. This will help the energy department determine if there is a need to increase the current FIT rates.
“It’s possible that over the years, it’s going to be the reverse – we don’t increase it and there will be a surplus in the FIT allowance fund and we actually benefit and we don’t increase anymore,” he said.