July 20, 2012 – Former Congressman Mark O. Cojuangco warns that Feed-in-Tariff (FIT) for electricity produced from renewable energy sources, will result in an unreasonable and unjustifiable added charge for each and every electricity consumer. the ERC grant the petition of Renewable Energy (RE) proponents and the National Renewable Energy Board (NREB) to allow the imposition
“The FIT is a shackle that will tie Filipino consumers for more than two decades without a hope of ever seeing the power rates from renewable sources go down. When implemented, FIT will place the Filipino consumer at the losing end of an unfair arrangement” explains Cojuangco.
Cojuangco says that should ERC decide, within the next few weeks to give in to NREB, then expect electricity prices to rise again as soon as the FIT collection is implemented and beyond.
Cojuangco warns that it will be a bad precedent for ERC to allow the imposition of FIT because it would open the floodgates for many other FIT petitioners, which would then permanently destroy the chance for lower electricity prices for decades to come.
He stated that the RE Act allows transitory support for RE. However, the way the petition is written, is tantamount to permanent support for the RE projects mentioned in the petition, which is a violation of the spirit of the RE Act of which main purpose is to eventually lower electricity prices.
Cojuangco declares that solons in the Committee of Energy at the HOR, are surprised at the magnitude and duration of these subsidies also believing that they run counter to the intent of the RE Act.
“Why the rush to a decision when a large number in the Committee itself have expressed extreme reservations,” he says.
“The Filipino will shoulder these subsidies for losses which, renewable energy will surely bring about” Cojuangco laments.
Cojuangco is concerned that the rush to allow FIT, regardless of the non-transitory nature of its implementation, is being expedited so people will think that something is being done to solve the problem of high electricity prices and lack of supply in the country.
“But the truth is FIT rates are onerous and are a money-losing proposition for the country and will bury us deeper into a hole. And yet, it will be highly profitable for the proponents,” Cojuangco emphasizes.
The miniscule amount of generating capacity resulting from, or in relation to, the massive amount of investment financed by FIT (meaning the people’s money) is what is so onerous about this arrangement.
He said the proposed FIT rates – P17.95 for Solar and P10.37 for wind – do not even take into account other hidden but societal costs such as: grid destabilization costs; the investment required for RE stand-by capacity; the inefficiency cost caused by priority dispatch incentives; the disruption caused by higher power outages and; the complacency generated by the illusion that something is already being done.MAJOR
These extra costs can be expressed in pesos and centavos if only the authorities would be transparent and do proper due diligence on these hidden but and consequences to society.MAJORREAL
The huge amount of subsidy to RE is not commensurate to its actual capacity given the very low utilization factors of these energy sources.
“The capacity figures posted are “nameplate”. They are far from reflecting what the true running capacities are,” ends Cojuangco.
“Magiging lokahan, huwag naman sana!” he says.