ERC approves higher FIT-All rate

Consumers may see higher electricity bills starting next month as the Energy Regulatory Commission (ERC) approved a new feed-in tariff allowance (FIT-All) that goes to paying renewable energy (RE) developers.

At a press briefing on Monday, ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said the commission has approved a new rate of PHP 0.2073 per kilowatt-hour (kWh), higher than the PHP 0.1189 per kWh previously imposed.

“Under the rules of the feed-in tariff system released by the ERC, FIT-eligible plants are guaranteed to be paid the approved rate. And if they already generated and delivered this electricity, they must be paid because this is essentially a commitment we made, and it is grounded in law,” Mr. Juan said.

The FIT-All is a uniform charge billed to all on-grid electricity consumers to support the development and promotion of renewable energy.

Payments are remitted to the FIT-All fund established and administered by the National Transmission Corp. (TransCo). The fund goes towards paying eligible RE developers who have obtained fixed rates for electricity generated by their projects.

As the administrator, TransCo is tasked to file the application before the ERC to determine the annual FIT-All rate.

The ERC said it has conducted public hearings across the country and “carefully reviewed” the application from TransCo.

“This decision is a careful balance. It secures the growth of renewable energy that our country needs, while keeping electricity rates affordable for every Filipino household and business,” Mr. Juan said.

According to the ERC, the new rate covers outstanding payments and maintains a small buffer fund to prevent delays in future payments to RE producers.

The funds are required to settle a PHP 19.06-billion FIT differential and build a PHP 3.74-billion working capital allowance, which serves as a buffer to guarantee timely payment to RE generators.

The ERC has ordered an immediate audit to guarantee that the FIT-All fund is managed properly. All parties involved, including grid operators and power distributors, have been directed to make their records available for this review.

The National Association of Electricity Consumers for Reforms (Nasecore) called for full transparency and accountability in FIT-All rate adjustments, saying that public consultations are not enough.

In a statement sent to BusinessWorld, the consumer group urged the ERC to release an annual audit of the FIT-All fund and provide detailed explanations of calculations used to determine any shortfall requiring rate adjustments.

Nasecore also called on the regulator to consider alternative measures to sustain RE funding without putting too much financial pressure on consumers.

“Transparency is not optional; it is a legal and moral obligation. If ERC fails to release the audit and provide proper documentation and accountability, it can only mean a failure of regulatory oversight. Consumers deserve to see how their money is collected and utilized,” said Nasecore President Patronilo L. Ilagan.

Another hike

The ERC also approved the proposed new market fee of the Independent Electricity Market Operator of the Philippines (IEMOP) covering the period of 2025 to 2027 to improve the operations of the Wholesale Electricity Spot Market (WESM).

The new market fee of PHP 0.0071 per kWh is the cost of administering and operating the WESM, which will be collected from generators transacting in the spot market.

The approved fee covers the operational, administrative, and capital expenditure budgets of both IEMOP as the market operator and the Philippine Electricity Market Corp. (PEMC), which is the WESM’s governing body.

According to the ERC, the market fee ensures “a reliable and transparent WESM,” as it provides cost predictability for generators and guarantees the integrity of the market’s critical functions like pricing, settlement, and data reporting.

The allocation includes critical IT and cybersecurity upgrades.

“This approval is a key step in the ongoing reform of the electricity market. It ensures IEMOP and PEMC can operate sustainably and fulfill their mandates, balancing industry needs with accountability to consumers,” Mr. Juan said. “This decision is part of our continuing efforts to promote a secure, competitive, and consumer-oriented power industry.”

WESM is where energy companies can purchase power when their long-term contracted power supply is insufficient for customer needs. — Sheldeen Joy Talavera, Reporter