THE Energy Regulatory Commission (ERC) has opined that the Department of Energy’s (DoE) plan to revise the net metering program has “legal drawbacks.”

“Upon perusal of the draft department circular, we were of the opinion that there are possible legal impediments in the implementation of the DoE circular. The crosscutting concern of energy security, affordability and reliability also needs to be considered and addressed,” ERC Chairman and Chief Executive Officer Agnes Devanadera said in a statement on Tuesday.

“The commission fully supports the development of the RE (renewable energy) program, and we commend the DoE for coming up with its draft department circular that seeks to encourage and promote electricity end-users participation into the net metering program. The department circular, however, should not veer away from the confines of the law that it seeks to implement,” she added.

In its letter to the DoE, the ERC said allowing RE facilities whose capacity is higher than 100 kilowatts (kW) and enabling those to supply electricity in times of power supply shortages or emergency situations are not supported by the express provisions of Republic Act (RA) 9513 or the “Renewable Energy Act of 2008.”

Also, multiple compensation mechanism provided by the draft rules is not consistent with the RE law and RA 9136 or the “Electric Power Industry Reform Act” (Epira) law.

The use of retail rate as one of the compensation mechanisms, as opposed to the use of blended generation cost that the ERC adopted in its recently promulgated amended net metering rules, will consequently increase the generation cost of the distribution utility (DU) through the net metering program.

The ERC made such a comment based on its simulation it conducted on the impact of using the retail rate as the price of export at different levels of net metering. The resulting retail rate, it said, is P13.8528 per kilowatt-hour (kWh) at the 30-percent maximum net metering penetration level, higher than the last feed-in tariff rate set at P8.69/kWh.

The proposed circular of the DoE said customers who will participate in the program shall be compensated based on the blended generation (weighted average power production cost), time of use (based on the time in which electricity is consumed), or any pricing methodology as determined by the ERC.

The ERC said the net metering rules should be made applicable to all types of RE sources and not just focused on a certain type of technology or resource, among others.

Moreover, responsibilities of the agency as outlined in the draft rules has already been addressed with its amended net metering rules released in October.

The recent amendments to the ERC’s net metering rules sought to improve the interconnection setup to take advantage of new technologies and to implement the renewable portfolio standards (RPS), simplify permitting procedures, reduce installation soft costs, minimize the rate impact to non net metering customers, address the subsidy impact on the non net metering customers, rationalize entitlement to the lifeline subsidy rate, and implement a stringent reporting process.