Transco seeks increase in FiT allowance for 2018

By Lenie Lectura – September 4, 2017

from Business Mirror

THE National Transmission Corp. (Transco) has filed an application seeking to increase the feed-in-tariff allowance (FiT-All) for 2018 to 29.32 centavos per kilowatt-hour.

FiT is a form of incentives for renewable-energy (RE) developers. Those who qualify are offered a fixed rate per kilowatt hour (kWh) for electricity generated by their projects over a period of 20 years.

The RE developers’ entitlement is taken from the FiT-All, which is billed to all on-grid electricity consumers. In short, consumers are the ones who shoulder the FiT rate through the FiT-Allowance, which appears as a separate line item in power distributors’ bills.

At present, 18.3 centavos per kwh is being collected from consumers.

Transco administers the FiT-All fund and, yearly, seeks approval from the Energy Regulatory Commission (ERC) in determining the tariff.

In its 25-page application, Transco asked the ERC to issue a provisional authority (PA) to collect the FiT-All of P0.2932 effective January 2018 billing period. “The computed 2018 FiT-All rate covering RE projects with at least nomination from the Department of Energy as of July 5 for the FiT system is P0.2932,” it said.

These projects, Transco added, have ongoing construction and have reached at least 80 percent completion, thus, are almost sure to operate within the period under consideration, if not already operating to date, Transco said.

Further, Transco’s application stated that the grant of PA will allow it to perform its duties to make a timely payment of the FiT rate to RE developers to which they are entitled, thereby allowing their continued operations.

In its application, Transco said the FiT-All fund by the end of the billing and payment for 2017 will have a deficit of P8,668,804,005.77.

This is because the ERC has yet to act on Transco’s 2017 FiT-All application, amounting to 22.91 centavos per kwh.

“[The] Backlog is caused by a combination of a lot of things, though not attributable to Transco because we are only the administrator. Still, we are looking for a solution,” said Transco President Melvin Matibag, referring to an earlier proposal to ask financial assistance from the World Bank (WB) or the Asian Infrastructure Investment Bank (AIIB) to be able to pay RE developers P8 billion worth of financial obligations.

“We are looking for funds so that we can cover the backlog without interests…30 [years] to 40 years of loan payment,” Matibag said. “[We went to the] WB and AIIB because they have untouched energy funds for renewable energy that could be availed of.”