Cheaper costs of renewable energy (Part 1)

Consumers should be able to look forward to a refund as well cheaper cost of electricity   from renewable energy resources. I have put on notice the renewable energy developers, members of the Developers for Renewable Energy Advancement (DREAM) and the Wind Energy Developers Association of the Philippines (WIND) that the higher Feed–in Tariff or FIT that they are receiving is illegal.  FIT paid to and collected by them are money that have to be accounted for and refunded to the electricity consumers because the collection of higher FIT is contrary to the policy statement that the development of the renewable energy resources for power shall be cheaper for the consumers.

On January 13, 2021, in my capacity as an electricity consumer as well as President of Laban Konsyumer Inc., I filed a Petition before the Energy Regulatory Commission to repeal its resolution that increased FIT retroactive to 2016 up to 2020. I also intervened and opposed the new application to increase Feed-in Tariff Allowance or FIT ALL from the current P 0.09 per kilowatt hour  to P 0.22 per kilowatt hour. Consumers will find “FIT ALL” listed among the components of our electricity bills under Universal Charges.

In this column and the next, I will explain what I believe are unjust and unfair costs being passed on to the consumers, to fill the bank accounts of the renewable energy developers, with the regulator standing by and letting it happen. One is reminded the warning that all that evil needs to win is for good men to do nothing.

In ERC Case No. 2021-001 R M, I called out the Energy Regulatory Commission to immediately repeal ERC Resolution No.06 dated May 26, 2020. I will henceforth refer this is as the Questioned Resolution.

In the Petition, I said that FIT-ALL rates and their constant increases have long been a heavy burden on Filipino consumers. And this tragic trend is continuing to weigh heavy on those most affected by the pandemic. It is appalling that ERC sits on this and decides to increase the FIT rates that are fixed payments to the renewable energy developers and in turn are being charged to consumers, when in fact, there was no valid and economic reason to do so.

To highlight the fact that the additional burden imposed by the Questioned Resolution will again be shouldered by the hapless consumers, it can be seen the already high FIT Rate for Solay energy at P9.68/kwh set in 2014 is now adjusted to a staggering P11.2758/kwh up to year 2020.  The same is true for wind energy which from the original FIT rate at P8.53/khw, now stands at P9.8976/kwh up to year 2020. These are almost two pesos and more than a peso adjustment for the solar and wind energy FIT rate, respectively, that will have to be borne by the consumers thru the FIT Allowance.

My Petition was, among others, precipitated because of the absolute inaction of the Commission. On December 16, 2020, I wrote the Chairperson and CEO of the ERC as well as the Commission’s individual members in connection with the issuance of the Questioned Resolution and appealed to recall the Questioned Resolution.  That letter have not been acted upon by the Commission.

In that letter, I said that as a “As a keen advocate of consumer rights, we respectfully submitted that there is an undeniable need to nullify the said ERC resolution to allow the proper observance of due process and set the proper forum, wherein all interested parties can engage in a hearing, especially with the participation of the consumers. At the onset, we respectfully highlight that the imposition of the abovementioned adjusted FIT rates does not comply with the requirements provided for under paragraphs 7 and 8 of ERC Resolution No. 16, Series of 2010, the “Resolution Adopting the Feed-In Tariff Rules” (the “FIT-Rules”) in relation to Rule 21 on Rule Making of the ERC RPP in Resolution No. 38, Series of 2006.”

In the legal parlance, I raised four (4) issues against the Questioned Resolution.

First, ERC committed grave abuse of discretion when they issued the questioned resolution without notice and hearing in violation of procedural due process of law as contained in the FIT rules and the ERC rules of practice and procedure.

Second, ERC committed grave abuse of discretion when they issued the questioned resolution which unduly and unlawfully burden electricity consumers amounting to blatant violation of their right to substantive due process of law.

Third, ERC committed grave abuse of discretion when it issued the questioned resolution which is unreasonable and confiscatory which will unduly burden the consumers.

Fourth, the questioned resolution was issued with lack of quorum.

I will tackle these issues in more detail in my next column.

Atty. Vic Dimagiba is President of Laban Konsyumer Inc.

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