ERC OK of FIT-All to raise power cost

MANILA, Philippines — Consumers will have to pay more for electricity after the Energy Regulatory Commission (ERC) approved a higher Feed-in Tariff Allowance (FIT-All) rate, which cover payments to renewable energy developers.

In a decision, the ERC allowed the National Transmission Corp. (TransCo) to collect 25.63 centavos per kilowatt-hour (kwh) from all on-grid customers, 7.33 centavos per kwh more from the previous rate of 18.3 centavos per kwh.

The approved rate is higher than TransCo’s request of 22.91 per kwh for the 2017 FIT-All rate, which should have been collected starting January last year.

The approved rate will cover the FIT differential amounting to P13.8 billion in 2017, the underrecovery of P4.4 billion in 2016, the P1-million disbursement allowance paid to the Land Bank of the Philippines and supervision fee for Bangko Sentral ng Pilipinas, and the P1.9-billion working capital allowance requirement of TransCo. 

The FIT-All is a uniform charge billed to all on-grid electricity consumers, reflected as a separate component in monthly electricity bills, to cover payments to renewable energy developers under the FIT system.

The FIT system details perks for power developers for a period of 20 years to invest in the more expensive renewable sector.

Collections are then placed in the FIT-All Fund which is being managed by TransCo.

In granting a higher FIT-All rate, the power regulator said it also considered the interest incurred due to late payments to developers.

 “It is worthy to note that the (FIT-All) Fund has already incurred interest, which is not part of the…simulation. The FIT-All formula in the FIT-All payment and collection guidelines does not provide for any projection in interest,” the ERC said.

However, despite the higher FIT-All rate, the FIT-All fund is still insufficient to cover all pending obligations of TransCo.

As of Feb. 5, 2018, total claims amounted to P40.12 billion, of which 82 percent has been paid, while 18 percent of P7.38 billion remains unpaid.