The Energy Regulatory Commission (ERC) has approved a slight increase in the Feed-in Tariff Allowance (FIT-All) for 2024, setting the new rate at PhP0.1189/kWh. The adjusted FIT-All rate, which will take effect starting the March 2025 billing cycle, will result in a minor increase in electricity bills but will help sustain the continued development of renewable energy in the Philippines.
In a release over the weekend, the ERC said the adjustment comes in response to the depletion of the FIT-All Fund, which was impacted by sustained low electricity prices in the Wholesale Electricity Spot Market (WESM).
If prices in the WESM—a marketplace where electricity is bought and sold based on supply and demand—are low, it can reduce the funds available for paying renewable energy producers under the Feed-in Tariff (FIT) system.
While the adjusted rate is higher than the current PhP0.0838/kWh, it remains lower than the PhP0.1220/kWh initially proposed by the National Transmission Corporation (TransCo). This adjustment, the ERC said, is designed to ensure fair compensation for renewable energy (RE) developers while also keeping electricity costs manageable for consumers.
The FIT-All is a universal charge collected from all on-grid electricity consumers, designed to support payments to renewable energy producers under the FIT system. The decrease in WESM prices in 2024 resulted in lower revenues for the FIT-All Fund, making it difficult to meet the obligations to RE suppliers.
“The FIT Differential, representing the difference between FIT rates payable to RE and WESM prices, was revised from TransCo’s forecast of PhP13.64 billion to PhP10.12 billion. The ERC used actual generation data for January to December 2024, rather than forecasted figures, to ensure a more accurate assessment,” the ERC said in a statement
ERC also conducted a detailed evaluation of administration and disbursement allowances, adjusting them to reflect actual expenses incurred in 2024, rather than relying on projected figures from TransCo.
The rate adjustment will take effect starting in the March 2025 billing cycle, affecting all on-grid electricity consumers. While consumers will see a slight increase in their electricity bills, the adjustment is necessary to maintain the financial viability of RE projects that are covered under the FIT system.
ERC reaffirmed its commitment to ensuring that FIT-All rates remain fair, transparent, and reflective of actual market conditions, helping both renewable energy developers and electricity consumers navigate fluctuations in energy pricing.
Share with us your thoughts on the new FIT-All rate adjustment. Do you believe this will help sustain renewable energy growth while keeping electricity rates fair for consumers? Share your thoughts in the comments below and follow Power Philippines for the latest energy sector updates!
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