Wednesday, June 21, 2017

ERC censured on costly FIT-All interests due to regulatory delays

Published May 15, 2017, 10:00 PM By Myrna M. Velasco

The Energy Regulatory Commission (ERC) had been censured on the millions worth of interest charges being passed on to the consumers arising from delays on its decision processes on the collection of feed-in-tariff allowance (FIT-All) that have to be remitted to FIT-qualified renewable energy developers.
ERC Commissioner Josefina Patricia M. Asirit disclosed in a Joint Congressional Power Commission (JCPC) public hearing that the interest charges on the FIT collection backlog already topped P230 million to-date.
That had been based on the P6.6 billion worth of FIT-All collection backlog that was in ERC’s record, but fund administrator National Transmission Corporation (TransCo) indicated that the amount actually climbed already to P7.7 billion.
Asirit further admitted such extent of interest charges shall be reflected eventually in the bills of all Filipino ratepayers, as add-on cost in the FIT-All line item in the electric bills.
Senate Committee on Energy Chairman Sherwin T. Gatchalian was exasperated at the prospect of just unambiguously letting the consumers burden these ‘FIT interest charges’ in their electric bills.
The lawmaker stressed “I hate to say it, but because of the delays of ERC approvals, we will be paying P230 million in interest payments. That’s why I am quite adamant in getting a definitive timetable (when the applications will likely be approved) from you (ERC) because I know that the amount will grow bigger. Everyday, it piles up.”
Gatchalian called on the ERC that despite the ‘internal conflict’ that snagged regulatory actions and the deliberations of cases at the Commission, they must finally get their acts together and focus on matters that could protect the interest of the consuming public.
He added “in line with attracting investors and promoting RE, we will never get serious investors if we don’t fulfill our contractual obligations – and FIT-All is one of them.”
Asirit, in turn, had told the oversight congressional body that they will decide on the pending FIT-All application of TransCo around September this year.
Gatchalian has directly correlated the accruing interest FIT-All charges “to the sluggish action of ERC Commissioners on applications of TransCo to collect higher FIT-All rates aimed at augmenting its subsidy to eligible RE developers and allowing it to pay its obligations.”
The FIT-All accounts for the peso-per-kilowatt hour (kWh) cost being charged in the electric bills of consumers – and the corresponding collections will be utilized as FIT payments to qualified RE developers.
For the new round of TransCo filing, it is expected to jack up the incentive scheme for RE by P0.2291 per kWh, an increase from the current P0.12 per kilowatt hour.

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