As mentioned in my previous column, January 30, 2021, this will be a narrative into the legal points raised and red flags surrounding the Feed-In-tariff or FIT.
First, the issuance of the Questioned Resolution, i.e. the increased FIT retroactive to five (5) years, from 2016 -2020, should be nullified for lack of due process. The Questioned Resolution was issued without an Energy Regulatory Commission (ERC) Petition for Rule Making filed and heard by the ERC for the purpose of adjusting the FIT. The reasons are as follows:
- The Questioned Resolution adjusted FIT retroactive for 5 years, instead of an annual review when appropriate.
- There were no filing and issuance of the Notices of Rule Making, no publication of the Notices, and no public hearing as required by the FIT Rules and the ERC Rules of Practice and Procedures or ERC RPP.
- There were no other power market participants, distribution utilities, electric cooperatives and consumer organizations that participated and were required to submit comments and recommendations to the ERC.
- Only the position papers by the Wind Energy Association of the Philippines (WEDAP) and the Developers Renewable Energy for Advancement, Inc. (DREAM) in the form of Motions for the Implementation of the Adjustments of the Feed –in- Tariff rates were accepted by the ERC.
- The Market Operations Service, Renewable Energy Division (MOS-RED) of ERC submitted their self-serving recommendation to their superiors without the benefit of cross examination by the power stakeholders.
Second, the Questioned Resolution violated procedural and substantive due process and will result to the electricity consumers paying higher FIT Allowance. The FIT Rules and the ERC RPP, both require that consumers be heard and be given the chance to be heard prior to the adoption of the Questioned Resolution. If not nullified, the increase in the FIT will translate to higher FIT Allowance or FIT All charges to the consumers which will continue for the next five (5) years. In fact. for calendar year 2021, the FIT All administrator, had filed an increase of the FIT All to P 0.22 per kwh from the current P 0.09 per kwh.
Third, the ERC violated Substantive Due Process when it failed to specify the public interest the Questioned resolution served to support. The ERC claimed that the use of the 2014 Consumer Price Index instead of the 2019 Consumer Price Index resulted to a lower increases in FIT is essentially misleading as the FIT increased substantially over the 2014-2015 FIT. The use of the 2019 CPI is not an excuse as the consumers were deprived the opportunity to present and cross examine evidence on the alleged public interest , if at all public interest is served. The ERC invocation is self-serving and anti-consumer. Further, the FIT adjustment did not consider the approved degression rate where FIT should actually go down instead of going up.
Fourth, we raised that there was in reality lack of quorum and that ERC railroaded the issuance of the Questioned Resolution knowing fully well that two (2) members of the Commission are retiring in July 10, 2020.
Why so?
The Questioned Resolution was dated May 26, 2020, was published on July 3, 2020 and took effect on July 18, 2020. Petitioners observed that only two (2) members of the ERC who signed the Questioned Resolution are incumbents and Commissioner Catherine P. Maceda did not take part while Commissioners Josefina Asirit and Paul Cervantes , soon both left in July 10, 2020, even before the Questioned Resolution became effective.
The implementation of the Questioned Resolution that increased hefty FIT tariff retroactive to five (5) years are left at the hands of the minority in ERC.
In summary, there exists solid grounds for the incumbent ERC to nullify the Questioned Resolution and to commence hearing on ERC Case Bo. 2021-001 RM as mandated by the Electric Power Industry Reform Act (EPIRA), Renewable Energy Act (R E Act), the FIT Rules and the ERC RPP.
ERC… your move.
Atty. Vic Dimagiba is President of Laban Konsyumer Inc.