State-run National Transmission Corporation (TransCo) has warned that the feed-in-tariff allowance (FIT-All) fund could be depleted, adversely impacting the financial viability of the beneficiary-renewable energy (RE) firms.
In a virtual conference undertaken by the FIT fund administrator, TransCo President and CEO Melvin A. Matibag forthrightly stated that “the delay in approval of the FIT-All rate application may potentially lead to the depletion of the FIT-All fund.”
The FIT-All fund accounts for the line item being collected from consumers’ electric bills and such revenue streams are being used to settle the FIT claims of qualified RE project developers.
Matibag further noted “we have challenges that point to regulatory delays that also prioritize the consumer welfare over the welfare of suppliers.”
Given that as a socio-economic dilemma, he told the FIT-incentivized RE companies that “we are in search of how to balance the competing challenges and needs of consumers and suppliers.”
TransCo filed an application with the Energy Regulatory Commission (ERC) last year for an adjustment of the FIT-All charge in the electric bills to P0.1881 per kilowatt hour (kWh), as reckoned on normal circumstances; and P0.2008 per kWh under Covid-19 scenario, but this is still pending for regulatory approval because the hearings have not been completed until now.
It was explained that the portended Covid-19 scenario in TransCo’s petition, “considers lower consumption of electricity,” and such was factored in as a denominator in the overall calculation of the proposed FIT-All adjustment.
TransCo lamented that “ERC decisions are always delayed, placing the FIT-All fund on ‘catching mode’ all the time.”
The state-run firm thus stressed that “payments to RE-FIT developers have been delayed,” and that “the delays in payments impact both the developers and consumers – as delays in developers’ expected revenues resulted in non-compliance of their covenants with lenders.”
On the part of the consumers, TransCo emphasized that they are being forced “to add more contributions to pay for the interest charges of delayed payments to RE-FIT developers.”
The government-owned firm likewise indicated that “the volatile prices in the Wholesale Electricity Spot Market add more uncertainties to the (FIT-All) fund.”
Given the problematic state of the FIT fund, Matibag appealed to the RE industry players “to work together and speak as one to provide our government relevant and useful information, so they can balance the interest of consumers and those who supply consumers in making decisions.”