The Energy Regulatory Commission (ERC) has defended the approval and implementation of the Green Energy Auction Allowance (GEA-All), saying the mechanism underwent public hearings and consultations before being cleared, amid renewed scrutiny over added charges on electricity bills.

The GEA-All allows the recovery of costs needed to support renewable energy developers that win government-run green energy auctions. It functions as a top-up mechanism, covering any shortfall between auction-guaranteed rates and actual earnings from the Wholesale Electricity Spot Market (WESM).

Speaking in an interview with DZBB on Sunday, ERC chairperson Atty. Francis Juan said the GEA-All is not an independent ERC initiative but a policy instrument under the Department of Energy’s (DOE) Green Energy Auction Program (GEAP), which aims to draw private investment into renewable energy generation.

Juan said the ERC’s role was to implement the mechanism following DOE policy direction and existing regulatory procedures.

“Ang bayad sa mga papasok sa Green Energy Auction ay nanggagaling sa kanilang benta sa WESM. Kung kulang iyon kumpara sa guaranteed rate ng DOE, doon pumapasok ang GEA Allowance,” the chairperson said. (“Payment to those joining the Green Energy Auction comes from their sales to WESM. If that is insufficient compared with the DOE’s guaranteed rate, that is when the GEA Allowance applies.”)

Juan added that higher market revenues would reduce the need for consumer-funded support.

“Kapag mas mataas ang kita nila sa WESM, mababawasan ang kailangan mula sa GEA Allowance Fund,” he added. (“If their earnings from WESM are higher, the amount needed from the GEA Allowance Fund is reduced.”)

The allowance, set at PHP 0.037 per kilowatt-hour, began implementation this year following an ERC decision issued in December. The charge appears as a pass-through item on consumer electricity bills, fueling concerns from consumer groups already paying legacy charges such as the Feed-in Tariff Allowance (FIT-All).

Juan reaffirms that the GEA-All went through regulatory safeguards before approval.

“Ilang public hearing at consultation ang dinaanan ng GEA-All, kasama ang mga grupo ng consumer,” he said. (“The GEA-All went through several public hearings and consultations, including with consumer groups.”)

He added that ERC proceedings were open and publicly accessible. He also acknowledged that not all groups may have actively joined the consultations but stressed that public notices and publications satisfied due process requirements.

The ERC chief argued that the allowance must be viewed in the context of long-term energy security, especially as the Philippines remains exposed to volatile global fuel prices.

He said increasing renewable energy capacity would help reduce dependence on imported fuel and cushion consumers from external shocks over time.

What’s your take? Does the GEA-All strike the right balance between near-term consumer costs and long-term energy security, or does it need recalibration? Join the conversation.

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