Wednesday, June 21, 2017

Energy Regulator approves additional Transco charge for FiT-All

Posted on May 24, 2017

THE Energy Regulatory Commission (ERC) has issued final approval for the petition of National Transmission Corp. (TransCo) to collect an additional P0.059 per kilowatt-hour from the current rate of P0.1240 from on-grid electricity consumers.
In a statement on Tuesday, the regulator said the adjustment in the feed-in-tariff allowance (FiT-All) will take effect “in the immediately succeeding billing period” after TransCo’s receipt of the ERC decision.

Alfredo J. Non, ERC officer-in-charge, said it was crucial to adjust the FiT-All rate being charged to consumers to allow TransCo to pay FiT-eligible plants “and stop the ballooning interest to be charged by RE (renewable energy) generators from the unpaid claim due to the delay in the disbursement” of the feed-in-tariff.

Calculated annually, the FiT-All is a uniform charge applied to the kilowatt-hours billed to consumers that are supplied with electricity through the country’s distribution or transmission network.

The FiT-All mechanism was established under the Renewable Energy Act of 2008, which aims to jumpstart the development of renewable energy sources such as wind, run-of-river hydro, solar and biomass plants.

The ERC said that it issued the approval in recognition of the need to update the FiT-All rate in order to address the inability of the FiT-All fund to pay in full the claims of FiT-eligible renewable energy developers.

It said as of April 25, the total FiT revenue claim was about P24.3 billion, of which only around 73% has been paid. The total unpaid claims amounted to some P6.6 billion, resulting in the fund incurring late payment interest charges equivalent to P230 million.

The regulator said a number of factors contributed to the insufficiency of the funds to pay FiT revenues, including the 30% growth in the generation capacity of FiT-eligible generators from December 2016 up to March 2017.

“Consequently, the FiT differential claim has increased and will continue to increase,” it said.

It cited “a growing disparity” between the forecast cost recovery rate and the actual cost recovery revenue because of the downward trend in market prices. It also attributed the deficiency in the FiT-All fund to the deterioration of the collection efficiency of the FiT-All collection agents. -- Victor V. Saulon

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