TransCo to seek higher FIT-All for RE subsidy

Published July 21, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/07/21/transco-to-seek-higher-fit-all-for-re-subsidy/

Fund administrator National Transmission Corporation (TransCo) will file for slight upward adjustment in the feed-in-tariff allowance (FIT-All), the rate component being collected from consumers as their out-of-pocket subsidy for renewable energy (RE) installations in the country.

The estimated adjusted FIT-All will be at P0.2278 per kilowatt-hour (kWh), which will incur marginal increase of P.0052 per kWh from the prevailing rate of P0.2226 per kWh.

The filing of the FIT-All adjustment will be toward the end of this month, according to TransCo President Melvin A. Matibag. The company is the administrator of the FIT-All fund and it is also in-charge of settling the FIT claims of qualified RE projects in the solar, wind, biomass and hydro sectors.

Matibag emphasized there is also a need to recoup costs corresponding to the adjustments in the inflation rate – and that will be factored in into the new FIT-All filing.

At this stage, he qualified that TransCo still has a surplus of P3.0 billion on its FIT-All collections, hence, that entails it will still have enough financial leeway to pay the current FIT-All claims of the RE developers.

That is a reverse of the RE companies’ predicament back in 2017 when there had been lag in regulatory approvals of the FIT-All adjustments; which subsequently caused TransCo’s collection shortfall of as much as P8.0 billion and had triggered FIT payment delays.

The FIT-All is a separate line item in the consumers’ electric bills – and that is seen staying there for the next 20 years being the duration of the pass-on of the targeted subsidy for RE projects.

The last renewable energy sources to get into the FIT incentive scheme will be the additional capacity for hydro and biomass; of which FIT qualification will conclude December this year.

In the last FIT-All adjustment ruling of the Energy Regulatory Commission (ERC), it reconciled the base figures of the calculation of the FIT-All charges, as it noted some “discrepancies in the plant capacities used by TransCo and ERC in computing the FIT-All.”

The regulatory body specified that it “made use of the capacity of FIT-eligible plants with approved certificate of compliance (COC), whereas TransCo used the projected FIT-eligible plants.”

ERC Chairperson Agnes T. Devanadera further stressed “there are other diverging factors, such as the FIT rates and the cost recovery rate, that contributed to the discrepancy in the FIT-All computation.”