ERC Justifies New Power Bill Charge, Cites Renewable Push

The Energy Regulatory Commission (ERC) has defended the implementation of the Green Energy Auction Allowance (GEA-All), saying the mechanism underwent extensive public hearings and consultations before approval, amid growing consumer concern over new charges appearing on electricity bills starting January 2026.

The GEA-All, set at ₱0.037 per kilowatt-hour, was approved for collection by the National Transmission Corp. (TransCo) to support renewable energy developers participating in the Department of Energy’s (DOE) Green Energy Auction Program. The amount, equivalent to 3.7 centavos per kWh, will appear as a separate line item on consumer power bills.

According to the ERC, all on-grid customers will shoulder the charge, which distribution utilities, retail electricity suppliers, and the National Grid Corporation of the Philippines (NGCP) are required to collect and remit no later than the 15th day of the month following each billing cycle. 

The commission also directed industry players, including NGCP and the Independent Electricity Market Operator of the Philippines, to make their records available for an immediate audit of the GEA-All implementation.

Policy-Based Mechanism

ERC Chairperson Atty. Francis Juan clarified that the allowance is not an independent initiative of the commission but a policy instrument under the DOE’s Green Energy Auction Program (GEAP), which aims to draw private investment into renewable energy generation.

“Payment to those joining the Green Energy Auction comes from their sales to WESM. If that is insufficient compared with the DOE’s guaranteed rate, that is when the GEA Allowance applies,” Juan said.

The GEA-All functions as a top-up mechanism, covering any shortfall between the guaranteed auction rates and actual earnings from the Wholesale Electricity Spot Market (WESM). This setup ensures renewable energy developers receive the fixed rates promised under DOE’s auction while minimizing financial risks for investors.

Juan added that the need for consumer-funded support would lessen when power producers earn more from market sales. “If their earnings from WESM are higher, the amount needed from the GEA Allowance Fund is reduced,” he said.

Undergoing Due Process

The ERC chairperson emphasized that the GEA-All’s approval followed the full regulatory process, which included public hearings and stakeholder consultations.

“The GEA-All went through several public hearings and consultations, including with consumer groups,” Juan said.

He added that while not all groups may have actively joined the sessions, the proceedings were open and publicly accessible. “Public notices and publications satisfied due process requirements,” he said.

The commission reiterated that the collection and use of the allowance will be subject to periodic review to ensure transparency and fairness in the application of the new charge.

Delicate Balancing Act

The DOE introduced the Green Energy Auction Program in 2021 to accelerate the country’s shift to renewable energy by offering fixed rates to qualified developers through competitive bidding. The GEA-All serves as the program’s financing backbone, enabling consistent payment to winning bidders despite fluctuations in market prices.

However, the new charge has drawn attention from consumer groups already facing legacy items such as the Feed-in Tariff Allowance (FIT-All), which similarly supports renewable energy generation. Critics argue that while green energy incentives are essential, they add to household electricity costs at a time of continued economic strain.

The ERC has maintained that the allowance represents a small fraction of overall power costs and supports long-term energy sustainability by fostering investment in cleaner sources. With implementation beginning in January 2026, the GEA-All marks another step in the Philippines’ ongoing transition toward a more renewable-based energy mix, even as regulators continue to assure the public of oversight, accountability, and transparency in its execution.

Source:

https://business.inquirer.net/564081/consumers-to-pay-extra-for-renewable-energy