Electricity rates are set to increase next month after the Energy Regulatory Commission (ERC) approved a hike in the feed-in tariff allowance (FIT-All) due to the depletion of the FIT-All Fund caused by persistently low prices in the Wholesale Electricity Spot Market (WESM).
In a statement, the ERC announced that it has granted the National Transmission Corporation (TransCo) approval to increase the FIT-All rate from P0.0838 per kilowatt-hour (kWh) to P0.1189 per kWh during its regular commission meeting on February 19.
The FIT-All is a standard charge applied to all on-grid electricity consumers, included in monthly electricity bills, and used to promote the development of renewable energy (RE) in the country.
“In approving the increase, the ERC noted the depletion of the FIT-ALL Fund due to sustained low prices in the Wholesale Electricity Spot Market (WESM),” the statement read.
“The lower-than-expected WESM prices adversely affected the fund’s capacity to cover the FIT payments, necessitating adjustments in the FIT-ALL computation to ensure the payments for the supply to consumers coming from renewable energy (RE) FIT-eligible power plants,” it added.
The ERC further stated that the FIT Differential, which accounts for the gap between FIT rates paid to renewable energy producers and prevailing WESM prices, has been revised to P10,125,029,884 from TransCo’s earlier forecast of P13,541,077,775, based on actual generation data from January to December 2024.
“The ERC is committed to ensuring that FIT payments are sustained to support the continued development of renewable energy projects while balancing the impact on consumers,” the statement concluded.
