TransCo nears full payment of feed-in tariff backlog

MANILA, Philippines — The National Transmission Corp. (TransCo) expects to wipe out the backlog to be paid to renewable energy (RE) developers under the feed-in tariff (FIT) within the month.

Transco has a balance of roughly P200 million left as of Feb. 25,  its compliance monitoring department manager Dinna Dizon said in a text message.

She said the amount has been reduced as of March 5 with the payment of the actual cost recovery revenue of RE developers.

“We estimate that we will be able to fully pay all outstanding and current amounts by then,” Dizon said.

The payments backlog was reduced significantly after the Energy Regulatory Commission (ERC) approved the FIT-allowance (FIT-All) rate of P0.2563 per kilowatt-hour (kwh) in May last year, which was charged to customers the following month.

Prior the approval, TransCo had estimated a deficit of P3.6 billion in the FIT-All fund by the end of the year.

After completing its payments to RE developers, TransCo will put funds in its buffer fund, which will be used to address any default or delay in the collection and/or remittance to RE developers.

“We need to build up the buffer fund called working capital allowance,” Dizon said.

Under the latest ERC approval of the FIT-All rate, TransCo is required to have a P1.9 billion working capital allowance.

TransCo had filed an application for FIT-All rate 2019, reducing its 2018 proposal to P0.2780 per kwh.

Since last year, Laban Konsyumer Inc. (LKI) president Victorio Dimagiba has been pushing ERC for an immediate action against the FIT-All being charged to consumers’ electric bills, which the group claimed has been burdening consumers with high prices.

Dimagiba said if ERC takes action and suspends the resolution of the pending applications, ERC would greatly benefit consumers and temper the effects of inflation by providing breathing space from increasing costs.

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

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

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