ERC Approves FIT-All Rate Adjustment In The Philippines To Sustain Renewable Energy Payments

The Energy Regulatory Commission (ERC) has approved the National Transmission Corporation (TransCo) application in the Philippines for the Feed-in Tariff Allowance (FIT-All) for 2024. The new rate has been set at PhP0.1189 per kilowatt-hour (kWh), and the adjusted collection will begin with the March 2025 billing cycle.

This decision was made during the Regular Commission Meeting held on 19 February 2025. The approved rate is lower than the PhP0.1220/kWh that TransCo had initially proposed but higher than the existing PhP0.0838/kWh currently being collected from on-grid consumers.

The ERC explained that the increase was necessary due to the depletion of the FIT-All Fund. The fund has been affected by the continued low prices in the Wholesale Electricity Spot Market (WESM), which reduced its ability to pay for the FIT incentives given to renewable energy power plants. Because of these lower-than-expected market prices, adjustments in the FIT-All computation were required to ensure that renewable energy suppliers receive their payments.

As part of the review process, the FIT Differential, which represents the gap between the FIT rates payable to renewable energy producers and the prices in WESM, was revised. TransCo had forecasted this difference to be PhP13.64 billion, but after ERC’s evaluation, it was adjusted to PhP10.13 billion. To make the assessment more accurate, the ERC based its calculations on actual power generation data recorded from January to December 2024 instead of relying on projected figures.

Additionally, the ERC also evaluated the Administration Allowance and Disbursement Allowance, which cover the costs of managing and distributing the FIT-All funds. Instead of using TransCo’s estimated expenses, the ERC used actual expenses from 2024 to determine the appropriate allowances.

The ERC has emphasized that its role is to ensure that FIT-All rates remain fair, transparent, and reflective of actual market conditions. By approving the adjustment, the commission aims to sustain the funding necessary to support renewable energy while balancing the impact on electricity consumers. The revised FIT-All rate seeks to provide continued support to renewable energy generators while considering the realities of the energy market.