ERC requires updated filing of FIT allowance for RE projects

by Myrna Velasco – December 17, 2015

from Manila Bulletin

Instead of staggered pass-on of adjusted feed-in-tariff allowance (FIT-All) for renewable energy (RE) facilities, the Energy Regulatory Commission (ERC) has been opting for an updated charges that will already reflect the cost of anticipated capacity additions next year.

This was indicated to the media by ERC Chairman Jose Vicente B. Salazar, as he noted that they would already want to have a clear picture of how much per kilowatt-hour (kWh) of FIT-All will be reflected in the bills.

In fact, he stressed that when the RE players manifested with the regulatory body on their planned filing for adjusted FIT-All, they have been asked to already crunch the numbers of the FIT-All that will be charged over three years.

The initial estimate of the National Transmission Corporation (TransCo) has reportedly been set at P0.12 to P0.13 per kilowatt (kWh) FIT-All for 2016, but this may change depending on the number of megawatt-capacities from additional projects coming on-line next year.

TransCo has been the duly designated FIT administrator that settles the FIT charges due to all qualified RE developers.

The current FIT-All being passed on in the consumers’ electric bills is at P0.04 per kWh, but this is seen jacked up by almost three times by next year because of additional capacity installations.

The cost-increase drivers in the FIT-All charge will be the newly qualified capacities from wind projects plus the anticipated entry of additional 450MW of solar by March 2016.

Salazar said they would prefer a “reflective adjustment” in the FIT-All rates, rather than a deferred one then there would be some “mismatch” in the cost recoveries.

More than 100MW capacities of wind projects had been added in the FIT-qualified installations on the second wave of rate approval at P7.49 per kWh.

These include the 54MW San Lorenzo wind facility of Trans-Asia Renewable Energy Corporation (TAREC); 54MW of Alternergy Wind One Corporation; and 36MW Nabas wind project of PetroEnergy Corporation.

For the solar race, the Department of Energy (DOE) is not expecting the whole chunk of 450MW by March next year, but it still expects substantial capacity to be added.