Philippines: TransCo seeks higher feed-in-tariff allowance

Philippines: TransCo seeks higher feed-in-tariff allowance

The National Transmission Corp. (TransCo) wants consumers to cover the
shortfall of payment to renewable energy (RE) developers eligible under the
feed-in tariff (FIT) system next year.

The state-run firm has filed an application with the Energy Regulatory
Commission (ERC) to increase the feed-in tariff allowance (FIT-All) to 29.32
centavos per kilowatt-hour (kwh).

The proposed FIT-All is eyed for implementation in January 2018, which will
be collected by distribution utilities (DUs), retail electricity suppliers
(RES) and the National Grid Corp. of the Philippines (NGCP) from end-users.

A uniform charge billed to all on-grid electricity consumers, the FIT-All
will cover payments for renewable energy projects eligible to receive FIT
incentives.

It is part of the implementation of the Renewable Energy Law promulgated in
2008, which will serve as an incentive to RE developers to further pursue
developments in the sector.

Under the FIT-All guidelines, TransCo is designated as the administrator of
the FIT-All fund and is required to make an annual determination of the
tariff.

TransCo estimates that the FIT-All fund it manages will have a deficit of
P8.67 billion, assuming its 2017 application is approved.

Meanwhile, it also needs to settle FIT differential for 2015, 2016 and 2017
amounting to P163.68 million, P528.6 million and P134.38 million,
respectively, which are due in 2018. The FIT differential pertains to energy
generation from 2015 to 2017 expected to be billed to TransCo.

As required, the FIT-All 2018 application was filed a year prior. This as
the ERC has yet to decide to approve the 2017 collection. For this year,
TransCo proposed a FIT-All of 22.91 centavos per kwh.

So far, 18.3 centavos per kwh is being collected from consumers, which was
just approved last June. This is an increase from the 12.4 centavos per kwh
previously charged to consumers.

Earlier, TransCo president Melvin Matibag said the state-run firm is in
talks with the World Bank and China-led Asian Infrastructure Investment Bank
for a zero-percent interest loan to cover the backlog to be paid to
renewable energy developers under FIT.

He said the agency has not been remiss in collecting the FIT-All fund but
collections are not enough due to regulatory lag.

The loan, which could amount to as much as P20 billion, is seen to solve the
outstanding balance of P8.2 billion as of July, Matibag said.

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Link to Original Article:
http://www.philstar.com/business/2017/09/02/1734853/transco-seeks-higher-fee
d-tariff-allowance

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com