Renewable Energy Charges May Rise, Burdening Filipino Households

MANILA, Philippines — Consumers may face higher renewable energy charges on their power bills as the National Transmission Corp. (TransCo) seeks to raise the feed-in tariff allowance (FIT-All) next year. In a filing with the Energy Regulatory Commission (ERC), TransCo proposed a FIT-All rate of P0.2154 per kilowatt-hour for 2027, slightly higher than the current P0.2011 per kWh. If approved, households consuming 500 kWh a month would pay about P107.70 in FIT-All charges alone. FIT-All is a uniform charge billed to all on-grid electricity consumers to fund guaranteed payments to eligible renewable power plants, including solar, wind and small hydroelectric facilities. All qualified projects are entitled to the incentive for up to 20 years. TransCo said the issuance of a provisional authority would allow the agency to continue making timely FIT payments to eligible developers. Without the approval of the proposed rate, TransCo warned that the FIT-All Fund could face a shortfall, potentially affecting payments to qualified projects. “Any delayed or partial payment will incur interest, which will eventually result in additional charges to end-users,” the agency stressed. As the administrator of the FIT-All Fund, TransCo is required to determine each year the FIT-All rate to be charged to consumers for the following year. The collection of the green energy auction allowance, another charge that supports clean energy projects, has been suspended until next month. The ERC, however, cannot extend the same relief to FIT-All, citing the insufficient buffer in the fund to suspend collections. A higher FIT-All rate next year could add further pressure on households already facing elevated electricity costs amid the ongoing energy emergency. In June, the Philippines recorded the highest average residential electricity rate in Southeast Asia at P12.43 per kWh, surpassing even Singapore’s rate by nearly a centavo. The Department of Energy and the ERC met with Meralco officials last week to discuss policy and regulatory reforms amid President Marcos’ push to remove system loss charges from electricity bills. System loss refers to the electricity lost before it reaches consumers, with the cost currently recovered through a line item on power bills. For consumers in Meralco’s franchise area, the charge makes up around five percent of their power bills.