By Lenie Lectura - July 13, 2017
THE National Transmission Corp.
(Transco) wants to ask financial assistance from the World Bank (WB) or the
Asian Infrastructure Investment Bank (AIIB) to be able to pay renewable-energy
(RE) developers P8 billion worth of financial obligations.
“There is no amount yet for the
loan, but it should be something to cover the backlog, which is about P8
billion already. I am looking at P15 billion to P20 billion, if interest
payment will be included since the loan could be availed of at zero interest,”
Transco President Melvin Matibag said.
Incentives are provided to RE developers
in order to encourage participation in the development of RE sources. These
incentives are provided under the Feed-in-Tariff (FiT) system, in which RE
developers are offered a fixed rate per kilowatt-hours (kWh) for electricity
generated by their projects over a period of 20 years.
The RE developers’ entitlement is
taken from a FiT Allowance (FiT-All) billed to all on-grid electricity
consumers. In short, consumers are the ones who shoulder the FiT rate through
the FiT-All, which appears as a separate line item in power distributors’
bills.
The Transco, which administers the
FiT-All, files a yearly application before the Energy Regulatory Commission
(ERC).
However, unwarranted delays in
the ERC approval was the reason Transco was not able to pay the RE developers.
Because of these delays, consumers have to pay consequential costs—the
P6.6-billion backlog in FiT rate payments owed by the government to RE
developers for the year 2016, including P230 million in interest payments
alone.
Matibag said the amount has reached
P8 billion to date.
“Backlog is caused by a combination
of a lot of things, though not attributable to Transco because we are only the
administrator. Still, we are looking for a solution,” he said.
In December 2015 Transco sought to
increase the FiT-All rate for 2016 to 12 centavos per kWh. Before the
application was approved, Transco filed another application in December 2016 to
cover for the 2017 FiT-All rates, this time asking to further hike the rate to
22 centavos per kWh.
“We are preparing also for 2018, but
we are looking for funds so that we can cover the backlog without interest the
30 years to 40 years of loan payment. The World Bank and AIIB have untouched
energy funds for renewable energy that could be availed of,” Matibag said.
This plan, Matibag added, was
already approved in principle by Energy Secretary Alfonso G. Cusi.
“It’s also being welcomed by Finance Secretary
[Carlos G.] Dominguez [III],” he said.
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