We own 30% of all RE firms

Since electricity users pay a so-called Feed-In Tariff (FIT) as a subsidy for renewable energy (RE) companies to make their operations viable, an energy sector insider said that consumers should be entitled to at least one seat on each firm’s board.

At least 30 percent of their declared investment is returned to RE firms as a subsidy. So, if a 50-megawatt solar farm is valued at P50 billion, it gets a P15-billion subsidy. There is no accounting for that money yet, the industry veteran told Nosy Tarsee.

“If you look for an audit report — the Commission on Audit or a private auditing firm — there is none,” he said. “What does that mean? If the money came from us, then technically and legally we own 30 percent of every solar farm that received the subsidy.”

The FIT is included in every electricity bill and is about 10 to 20 centavos per kilowatt hour. Consumption of 1,000 kilowatt-hours would yield P200 in a monthly subsidy from one household. Meralco and the electric cooperatives collect this monthly. The National Transmission Corp. can provide the total amount of FIT collections, but the estimate is they could be up to P1 trillion from the time the tariff was first collected.

The computation is simple: check Meralco’s annual report and see how many megawatts of electricity were delivered. Multiply that by the 20-centavo charge to determine how much was collected.

You only need the annual reports of the utilities to know how much electricity was sold and how much money was collected, then determine who collected it all and whether or not it was remitted properly.

Under the Renewable Energy Law, the feed-in tariff was supposed to be collected for only 12 years, after which the Department of Energy would recommend whether or not to continue collecting it. Since the collection started around 2014, after the law took effect in 2012, it should be reviewed this year.

Electricity distributors collect the charge and remit it to TransCo. The funds do not pass through the National Treasury; they stay with TransCo which distributes them. A developer applies, TransCo evaluates the project and releases the subsidy accordingly.

The argument follows that consumers effectively own 30 percent of every subsidized plant.

Since electricity prices remain high, the least the government can do is to provide documentation recognizing consumers as owners, or form a corporation representing their interests, including board representation proportional to the 30-percent stake.

“However, such mechanisms are not clearly provided for in law, raising concerns that the funds were simply distributed,” the industry veteran conceded.