TransCo seeks ERC OK of hike in Fit-All rate

By Danessa Rivera (The Philippine Star) | Updated October 21, 2017 - 12:00am

http://www.philstar.com/business/2017/10/21/1750786/transco-seeks-erc-ok-hike-fit-all-rate

MANILA, Philippines — The National Transmission Corp. (TransCo) is pressing the Energy Regulatory Commission (ERC) to act on its petitions as it still reels from over P7-billion backlog in payments to renewable energy developers under the feed-in tariff (FIT) system, its top official said.

TransCo president and CEO Melvin Matibag said the agency, as the FIT-allowance fund (FIT-All) administrator, has an outstanding balance of P7.5 billion as of Oct. 5.

This is equivalent to a seven-month backlog in payments to renewable energy developers, he said.

The amount is lower compared to the P8.1-billion outstanding balance in July since the ERC approved TransCo’s petition to raise the FIT-All rate to 18.3 centavos per kilowatt-hour (kwh) last May, Matibag said.

However, he said the ERC-approved collection, which was included in consumers’ bills last June, is still not enough to cover all payments and interests payments to developers.

Earlier, Matibag said the agency has not been remiss in collections with a 99 percent collection efficiency and the backlog is a result of regulatory lag.

TransCo has applied for another increase in the FIT-All rate for 2017, this time asking to further hike the rate to 22 centavos per kwh.

Even before the ERC can give a final decision on the 2017 rate, the agency has already filed to raise the collection from consumers to 29.32 centavos per kwh.

To cover the backlog, TransCo is proposing to borrow the outstanding balance and more from multilateral lenders like Asian Infrastructure Investment Bank (AIIB) and World Bank.

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

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.