TransCo eyes up to P20 B loan for FIT payment

By Danessa Rivera (The Philippine Star) | Updated July 15, 2017 - 12:00am

http://www.philstar.com/business/2017/07/15/1719601/transco-eyes-p20-b-loan-fit-payment/

MANILA, Philippines - The National Transmission Corp. (TransCo) is in talks with the World Bank and China-led Asian Infrastructure Investment Bank (AIIB) for an interest-free loan of up to P20 billion to cover the P8-billion payments backlog to renewable energy developers under the feed-in tariff (FIT) system, a top official said.

In a presentation during the second Philippine Hydro Summit, TransCo compliance monitoring department manager Dinna Dizon said the agency has been billed P30 billion to cover payments for a total 1,107.8 megawatts (MW) under the FIT scheme.

“But we have only made 72 percent in payment, so the outstanding balance is about P8.1 billion as of July 5,” she said.

As the administrator of the FIT-allowance (FIT-All) fund, TransCo has not been remiss in collections and the backlog is a result of regulatory lag, its president and chief executive officer Melvin Matibag said.

“In fact, TransCo has a 99 percent collection efficiency but the problem is, our collections are not enough,” he said.

A solution being looked at is to borrow the outstanding balance and more from multilateral lenders like AIIB and World Bank, which have energy funds for renewable, the TransCo chief said.

“I am talking to the AIIB and World Bank if they can loan us at zero interest, which we will use to pay developers with the commitment that all of our collection in the coming years will be paid back,” Matibag said. “I’m looking at P15-20 billion including buffer because we’re eyeing zero percent interest.”

The proposal to borrow has been approved-in-principle by Energy Secretary Alfonso Cusi and welcomed by Finance Secretary Carlos Dominguez, he added.

“I’m preparing the memo by the end of the month,” Matibag said.

However, if approved, it would require regulatory issuances to allow TransCo the undertaking, Dizon said.

In June, the Energy Regulatory Commission (ERC) approved an increase of 18.3 centavos per kilowatt-hour in FIT-All which will be reflected in consumers’ bills by June.

Before the approval, TransCo has been charging 12.4 centavo per kwh from consumers.

The higher FIT-All rate was supposed to cover the unpaid P6.6 billion in payments to renewable energy developers under the FIT system.

However, the amount has ballooned to over P8 billion because “the FIT-All fund has yet to receive collection for the 18.3 centavos per kwh because this was just implemented starting June billing period,” Dizon said.

The FIT system details perks for power developers for a period of 20 years to invest in the more expensive renewable sector.

Payment to developers come from the collection of FIT-All, a uniform charge billed to all on-grid electricity consumers, reflected as a separate component in their monthly electricity bills.