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TransCo to apply for lower FiT rate for 2019

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TransCo

THE National Transmission Corp. (TransCo) expects electricity users to pay a lower feed-in tariff allowance (FiT-All) for 2019 as it plans to seek from the Energy Regulatory Commission (ERC) a rate below 2018’s P0.2932 per kilowatt-hour (kWh).

“Our projection is lower than what we filed in 2018,” Melvin A. Matibag, TransCo president and chief executive officer, told reporters.

He said the state-led company’s application for this year at P0.2932 per kWh has yet to be approved by the ERC.

Last month, the ERC authorized the collection of a FiT-All equivalent to P0.2563 per kWh starting in June, or an increase of P0.0733 per kWh from the current P0.1830 per kWh. The new rate covers the FiT-All for 2017.

Calculated annually, the FiT-All is a uniform charge applied to the kilowatt-hours billed to consumers who are supplied with electricity through the country’s distribution or transmission network.

The uniform charge is paid to developers of renewable energy power plants. The FiT-All mechanism was established under the Renewable Energy Act of 2008, which aims to jump-start the development of renewable energy sources such as wind, run-of-river hydropower, solar and biomass plants.

The collected amount is managed by TransCo before the fund is paid to the developers. The FiT-All was added in the monthly bills of electricity users starting in 2016.

Mr. Matibag said the lower projection for 2019 comes as the company’s under-recovered FiT-All goes down after the ERC approval of the 2017 rate.

“By the end of the year we are projecting [that the deficit] will be lower,” he said, placing the figure at P4.6 billion from P6.1 billion last year.

TransCo has said that the unpaid FiT to the renewable energy developers accumulated in part after the Department of Energy (DoE) increased the installation target for solar power projects to 500 megawatts (MW) from 50 MW. This left more developers billing TransCo for their guaranteed FiT.

The backlog was also worsened by the delay in the approval of the rate of FiT-allowance collected from electricity users, which TransCo applies for yearly.

Mr. Matibag said so far TransCo had paid P500 million in interest expense because of the delays in the approval of the company’s FiT-All applications through the years. The expense will be tucked into the future FiT-All to be collected from consumers, he said. — Victor V. Saulon