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ERC told: Hasten adoption of net-metering program

by Jonathan L. Mayuga

This article was originally published in the Business Mirror

The Institute for Climate and Sustainable Cities (ICSC) is urging the Energy Regulatory Commission (ERC) to hasten the adoption of net metering, or NM, to empower consumers to displace fossil-fuel electricity generation.

ICSC made the call during public consultations on proposed amendments to the country’s NM program, officially known as Resolution 9 Series of 2013, a resolution adopting the Rules Enabling the NM program for renewable energy (RE), on Wednesday.

NM is a system in which solar panels or other RE generators are connected to a public-utility power grid, and surplus power is transferred onto the grid, allowing customers to offset the cost of power drawn from the utility. The system is mandated under Section 10 of Republic Act (RA) 9513 and Section 7 of its implementing rules and regulations, which provides that, in consultation with National Renewable Energy Board (NREB), the ERC shall establish the net-metering interconnection standards and pricing methodology.

According to the ICSC, a larger number of NM installations will augment power supply during peak demand periods, lower electricity spot-markets rates, and bring down electricity rates by reducing transmission and distribution costs, as well as offset the need to build more fossil-fuel power plants.

ICSC also proposed that the ERC mandates distribution utilities (DUs)and electric cooperatives to pass-on the savings attributable to the NM program to their customers.

“Widespread adoption of net metering will not only reduce electricity bills in the Philippines but ensure growth in an industry bound to rake in billions of investment dollars to the country. Once we set our electricity fundamentals right, we pave a pathway toward economic development powered by modern and clean energy sources,” said Pete Maniego, senior policy advisor at ICSC and former NREB chairman.

NM brings benefit, particularly to consumers, ICSC said, because it will encourage households and businesses to shift to RE, thereby, reducing the country’s dependence to fossil fuel-based electricity.

So far, the ERC revealed that 473 customers have NM installations, with an aggregate installed capacity of 2,954 kilowatts (kW) as of May 27 this year.

The number of customers with NM systems would have easily exceeded 500 by now, Maniego said.

Manila Electric Co. (Meralco), he narrated, submitted a sample bill comparison to the ERC in connection with the NM amendments based on August 2016 rates. A customer with a consumption of 300 kilowatt hour (kWh) a month, prior to installing NM system, reduced his consumption to 70 kWh after the installation. As a result, his electricity bill went down from P2,645.62 to just P402.22. This is an equivalent of 85- percent reduction from his previous bill, he said.

“The NM installations provide supply to the grid during peak demand periods.  Considering the low power reserve of the country, this additional supply helps in augmenting supply, and thus, in mitigating brownouts,” he said.

Moreover, NM installations are paid only the blended grid rate for export to the  DU. This rate is much lower than the spot-market rate. As the supply from the NM installations also reduced peak demand resulting to lower purchases of DUs from the Wholesale Electricity Spot Market, they contribute to lowering electricity rates.

He said even households in the low-income bracket may install solar rooftops to reduce their bill.

“There are available loan packages from commercial banks and government financial institutions for solar-rooftop installations,” Maniego added.

ICSC said the Philippines is considered one of the hottest markets for RE, ranked top 5 in Asia by Ernst and Young for RE investment attractiveness.

Equis, one of the largest utility- fund manager in Asia, estimates that the Philippine RE sector is currently valued to be over $2 billion.

Old regulations tied to fossil-fuel electricity generation, however, give the country one of the highest electricity prices in the world.

“Filipinos are burdened by expensive electricity rates so it’s difficult for people to feel that their economic fortunes are changing for the better. The government should aim to make net metering mainstream across the country and, in turn, help people by passing on reduced electricity prices,” Maniego said.

The ICSC said an NM campaign aimed at getting mainstream adoption could be jump-started by requiring all DUs and electric cooperatives to inform the public about the benefits of the NM program.

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