Penalty awaits Non-Remittance of FIT

Manila Bulletin 
By Myrna M. Velasco 
Published: August 31, 2013 In the proposed collection and payment guidelines for feed-in-tariff allowance (FIT-All) for renewable energy (RE), the Energy Regulatory Commission (ERC) is being empowered to impose penalties versus power entities which will fail in remitting their FIT-All collections.
Section 2.5 of the FIT Rules stipulates that “the ERC is authorized to impose penalties to erring parties to prevent default or delay in payment and/or remittance of the FIT-All and/or ACRR (Actual Cost Recovery Revenue).” Violations will cover even partial remittance of FIT-All collections.
It was explained that a partial or non-remittance of FIT-All collections would have be avoided because this will unduly burden the FIT Administrator, which is the National Transmission Corporation (TransCo).
While it was stipulated in the Rules that there shall be provision for working capital allowance (WCA) that will be included in the FIT-All, it is seen that this cannot fully guarantee that the administrator will not suffer financial dilemmas if there would be default on payments or remittance of the RE subsidy.
The WCA will serve as a buffer “for working capital requirements to address any default or delay in the collection and/or remittance of the FIT-All and/or actual cost recovery revenue,” the rules said.
The FIT-All and ACRR will have to be collected and remitted to TransCo by the distribution utilities from their captive customers; the Retail Electricity Suppliers and local RES from their contestable customers; the National Grid Corporation of the Philippines from end-users directly connected to its system; and the Philippine Electricity Market Corporation (PEMC) will be collecting the proceeds as ACRR of eligible RE plants from WESM (Wholesale Electricity Spot Market) participants.
The ACRR, in this case, “is the amount of cost recovery revenue actually due to the RE eligible plant and billed by the relevant collection agent to the consumers” within specified billing periods.
The amount has to be derived from the actual RE generation multiplied by the actual cost recovery rate of the WESM or the host distribution utility.
The components of the FIT-All to be collected from consumers include: FIT differential; cost recovery revenue for ACRR; working capital allowance; administration allowance and disbursement allowance.   source