TransCo applies for FIT-All hike to P0.2932/kWh

Published August 27, 2017, 10:00 PM By Myrna M. Velasco

http://business.mb.com.ph/2017/08/27/transco-applies-for-fit-all-hike-to-p0-2932kwh/

The feed-in-tariff allowance (FIT-All) charge in the electric bills of Filipino consumers is anticipated to go up to a punishing P0.2932 per kilowatt hour (kWh), primarily to plug the massive deficit in collections of fund administrator National Transmission Corporation (TransCo).

TransCo President Melvin A. Matibag confirmed that their FIT-All filing at the Energy Regulatory Commission (ERC) this week (August 31) will be hiked to that level and will round up to equivalent collection of P24.9 billion.

Essentially, the portended increase will be P0.1102 per kWh from where the current FIT-All rate at P0.1830 per kWh, reflected as separate item in the electric bills of consumers.

It had been a steady rise in the FIT-All charge component in the electric bills since it was first enforced in 2014 from P0.04 per kWh; to P0.1240 per kWh in 2016; and then with the additional approval of P0.0590 per kWh this year.

Matibag noted that the higher-end of their computation for this year’s FIT-All petition hovered at P0.3305 per kWh and will translate to P28 billion worth of collections.

“But we will not pray for this rate since it covers plants that are not yet sure to come in based on current status,” he explained.

Matibag emphasized “our prayer for rate of P0.2932 per kWh covers only plants with at least nomination for FIT eligibility from DoE (Department of Energy).”

TransCo is still waiting for the approval of the 2017 adjustment it sought for the FIT-All, the per kilowatt hour pass-on to consumers – and of which collections are funneled as cash incentive to renewable energy developers.

For the supplemental adjustment being sought this year that could have added P0.0461 per kWh in the pass-on cost because TransCo’s filing had been to adjust the FIT-All rate to P0.2291 per kWh.

The FIT fund administrator nevertheless indicated that they had already recalculated the figures, including the shortfall in collection, hence arriving at the propounded higher FIT-All cost recovery for calendar year 2018.

With the RE cost subsidy being referenced on average settlement prices at the Wholesale Electricity Spot Market (WESM), the plummeting spot market prices had taken a ‘reverse effect’ on the FIT-All charges, hence, the manifesting annual increases on the filing of TransCo.

And with market competition pulling down electricity prices further, the prospects for the FIT-All would also get more upsetting with highly probable hikes on such charge.