By Myrna M. Velasco
From having staggering eight-month arrears last year, state-run National Transmission Corporation (TransCo) was able to substantially pare its settlement backlog of feed-in-tariff (FIT) to renewable energy (RE) developers to just one month which is now just equivalent to P200 million.
According to TransCo President and CEO Melvin A. Matibag, that was made possible because of the various efficiency measures the company had instituted so it can pay the RE developers on time as much as possible.
Essentially, that was a big improvement since as of June last year, the company was still at a collection shortfall of P4.0 billion, which then set off at least four months payment lag to the RE companies.
Given such positive development, Matibag indicated that TransCo is now “drafting a supplemental pleading to be submitted to the ERC (Energy Regulatory Commission) requesting for a lower FIT-Allowance collection.”
That way, he expounded, “consumers will benefit from lower electricity rates due to lower FIT-All component in their bills.”
For several years, FIT payments to RE developers had suffered several months of delays – at one point reaching as massive as nine months, and that had caused financial distress to some of the project sponsors and their lenders.
In fact, in the past two years, delays in the approval of FIT-All adjustments left TransCo with mammoth collection deficiency of about P8.6 billion plus over P500 million of interest charges.
Often, there are regulatory backlogs in the approval of FIT adjustments at the ERC and that hobbles the ability of TransCo, being the FIT fund administrator, to adhere to timely payments of FIT claims of the qualified RE firms.
The last FIT-Allowance hike approval by the ERC last year had been at P0.0733 per kWh, jacking up the subsidy charge then from P0.1830 per kWh to P0.2563 per kWh.
FIT-Allowance is a line item in the electric bills representing the per-kilowatt hour cost subsidy to RE component of power supply used in the provision of service to electricity consumers.
And for this 2019, TransCo sought that the FIT-Allowance be adjusted upward anew to P0.2780 per kWh, a portended increase of P0.0217 per kWh from the current level – but that may already be lowered based on TransCo’s latest pronouncement.
The FIT-subsidized projects were those endorsed by the Department of Energy (DOE) to avail of such incentives; and subsequently affirmed by the ERC via the issuance of their respective FIT-certificate of compliance (FIT-COC) that warrants them technical eligibility to operate their facilities and for these to be underpinned by the FIT subsidies.