TransCo to end 2017 with P8B in outstanding payables

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NATIONAL Transmission Corp. (TransCo) expects to end the year with P8 billion in outstanding payables, its president said, pointing out that the amount does not include the interest incurred because of the delay in meeting payment obligations.

Still, the state-led agency that handles the payment to renewable energy companies eligible for feed-in-tariff (FiT) remains hopeful that it will be able find funding to partly address the deficiency.

Melvin A. Matibag, TransCo president and chief executive officer, said he remains in contact with the World Bank even as a plan to borrow between P15 billion and P20 billion from the international lending agency failed to materialize.

Mukhang depleted ang funds nila (Their funds seem to be depleted),” he said in an interview on the sidelines of a recent Senate hearing. “But I’m still talking to them.”

TransCo has been pointing out that regulators need to approve a higher feed-in-tariff allowance (FiT-All) to allow the agency to pay FiT-eligible plants and stop the ballooning interest because of the delay in the disbursement of the guaranteed tariff.

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

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.

“By the end of the year, absent of any FiT rate adjustment, we estimate to incur P8-billion outstanding payables. We have included this amount in our application with the ERC (Energy Regulatory Commission) for the 2018 FiT-All rate,” Mr. Matibag said.

He said P0.1830 per kilowatt-hour (kWh), the rate approved by ERC for 2016, is insufficient to address TransCo’s total payables. TransCo has a pending application for P0.2291 for 2017 and has yet to receive even a provisional authority to collect the higher amount.

“We have in fact showed in the 2018 application that we need P0.29 to P0.30 per kWh as of date,” he said.

As of Nov. 6, 2017, TransCo has managed to pay P27.26 billion or 79.44% of its obligations. Its unpaid balance as of the period was P7.06 billion, excluding interest payment of P288.92 million.

Mr. Matibag said the billing statement received by TransCo for October 2017 showed that the agency was delayed in its payment by seven to eight months. — Victor V. Saulon