TransCo reduces proposed 2019 feed-in tariff allowance

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THE National Transmission Corp. (TransCo) has asked the Energy Regulatory Commission (ERC) to reduce by around 3 centavos the feed-in tariff allowance (FiT-All) it will be collecting from consumers for 2019, its top official said.

“We requested ERC to make an adjustment to the [FiT-All] from our original application ‘nung (in) 2018,” Melvin A. Matibag, TransCo president and chief executive officer, told reporters last week.

He said TransCo’s manifestation to amend its previous application was submitted on March 6 requesting the 2019 rate to be P0.240 per kilowatt-hour (/kWh).

Based on TransCo’s application submitted to the ERC in July last year, it was seeking approval for a FiT-All of P0.273/kWh for 2019.

“So may (there will be) rate reduction.”

He said TransCo applied for the reduction because it was able to reduce its payment backlog to renewable energy developments.

He added that the company was also on its way to fully cover its buffer fund.

“P200 million na lang as we speak… para on time na kami (P200 million remains as we speak… for us to be updated with payment),” Mr. Matibag said when asked about the amount that TransCo has yet to pay developers.

“Starting May on-time na; wala na kaming backlog (we will be updated in our payments; we won’t have any backlog),” he added.

The amended application comes as TransCo awaits the approval of its FiT-All application for 2018, amounting to P0.2932 per kWh.

In May 2018, the ERC authorized the collection starting in June 2018 of a FiT-All for 2017 equivalent to P0.2563/kWh, or an increase of P0.0733/kWh from the previous P0.1830/kWh.

Calculated annually, the FiT-All is a uniform charge that is applied to 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 Republic Act No. 9513, or 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.

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

TransCo previously said that unpaid FiT for renewable energy developers had accumulated in part after the Department of Energy 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 every year. — Victor V. Saulon