Thursday, August 11, 2011

ERC asked to deliberate on FIT applications on rate parameters

August 11, 2011, 8:00am

MANILA, Philippines — Hopes are dimming for a timely decision on the feed-in-tariff (FIT) charges for renewable energy given the legal technicalities raised that will likely hamstring continued deliberations on the application of the National Renewable Energy Board.
As debates on the FIT charges heat up, policy questions are thrown as to why the Energy Regulatory Commission (ERC) opted to try the case on the parameters of “rule-making” and not on a “rate case system.” since the latter gives the affected public greater avenue for participation in the proceedings.
The National Grid Corporation of the Philippines (NGCP), Foundation for Economic Freedom (FEF), and Manila Electric Company (Meralco) opined that the manner in which the FIT petition was filed has been anchored on a rule-making procedure; which should not have been the appropriate approach because the resulting FIT Allowance will impact on the rates to be passed on to consumers.
Given that, the parties which also include the National Association of Electricity Consumers for Reforms Inc. (Nasecore) manifested that the FIT charges should have been petitioned for as a “rate case” and must give the public and all relevant stakeholders the chance to submit their comments or opposition on the filing.
The parties indicated that under the “rule-making” precept, there is very limited scope for public participation in hearing the case because this is not subject to the same rigor and procedural requirement demanded by a rate-setting mechanism.
The FEF in particular argued that “the present course of the ERC, which is rule-making and not rate-setting is contrary to the intent of the framers of the Constitution’s promotion of ‘general welfare’ as this short-cuts the right of the public to be notified, heard and more importantly object.”
The group then asked the Commission to dismiss the current petition and will instead require the NREB or the concerned parties to file the FIT application/s that must be in compliance with the more comprehensive requirements of a rate-setting scheme.
The NGCP echoed the view that “the approval of the FIT and the degression rates should be applied as a rate case as this will directly affect the customers by way of the FIT Allowance charges.”
The grid operator further proposed “that there should be separate applications for: a) the setting of the FIT system under rule-making; and b) the approval of FIT and the degression rates under a rate case.”

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