ERC Approves FIT-All Rate Hike to Support Renewable Energy Producers

The Energy Regulatory Commission (ERC) has approved an increase in the feed-in tariff allowance (FIT-All) to support renewable energy (RE) producers, which is expected to result in higher electricity costs for consumers. In an order promulgated on July 31, the ERC authorized the National Transmission Corp. (TransCo) to collect an additional P0.1348 per kilowatt-hour (kWh) starting August. This increase will bring the total FIT-All rate that TransCo is entitled to collect to P0.3359 per kWh, up from the current P0.2011 per kWh. FIT-All is a uniform charge collected from electricity consumers to cover payments to RE developers for electricity generated from renewable sources at fixed rates. The fund is administered by TransCo and maintains a working capital allowance (WCA) that serves as a buffer to cover delays or defaults in FIT-All collections and remittances. According to TransCo, the WCA adjustment is intended to stabilize the fund, ensure timely payments to RE developers, and avoid further interest charges that would be passed on to consumers. However, the WCA balance was in a critical state at the end of 2025, with only P700 remaining, significantly below the required financial cushion of P3.74 billion. This shortfall stems from the "delayed implementation" of collecting the 2025 rate, which only began in November. TransCo stated, "In effect, the FIT-All Fund entered CY (Calendar Year) 2026 without the required WCA and lacked the necessary buffer to address funding and cash flow requirements." Furthermore, the FIT-All fund recorded a cash flow deficit, with total monthly obligations hitting P1.9 billion against collections of P1.8 billion. Lower-than-expected cost recovery revenue due to actual market prices being significantly lower than projected rates also contributed to the lack of available cash to build up the WCA. "In view of the current status of the FIT-All fund balance and the necessity for TransCo to continue paying its FIT-All obligation to eligible RE plants, the Commission finds it reasonable to issue this provisional authority," the ERC said. TransCo recently filed an application with the ERC for a proposed FIT-All tariff rate for 2027 of P0.2154 per kWh to continue supporting RE developers. The Philippines is gearing up to energize 10,000 megawatts (MW) of additional capacity by 2028 to stabilize the grid and eventually ease electricity prices. Energy Secretary Sharon S. Garin mentioned that the target is 4,000 MW this year, with additional capacity coming online next year. This target capacity forms part of the 200 energy projects slated for completion by the end of the current administration. Energy Undersecretary Mario S. Marasigan stated that 45 projects with a capacity exceeding 1,900 MW have been completed, and 31 more projects with 1,800 MW of capacity will be underway by the end of the year. Starting next year, the Philippines expects to energize over 6,000 MW in additional capacity from energy projects coming online through 2028. Approximately 5,300 MW will come from renewable energy projects, while 1,300 MW will come from conventional energy technologies.