P32.33-B FIT payments to RE developers sought

Published August 30, 2021, 6:30 AM

by Myrna M. Velasco

Fund administrator National Transmission Corporation (TransCo) has applied for P32.331 billion worth of feed-in-tariff (FIT) subsidy that will be utilized as payment to qualified renewable energy (RE) developers for calendar year 2022.

In its filing with the Energy Regulatory Commission (ERC), TransCo similarly sought that the FIT Allowance (FIT-All) to be passed on in the electric bills of all Filipino ratepayers will be hiked to P0.3320 per kilowatt-hour (kWh). That, in turn, will entail an increase of P0.2337 per kWh from the prevailing FIT-All rate of P0.0983 per kWh.

The state-run company indicated that if the higher FIT-All rate of P0.3320 per kWh would not be granted, the alternative rate it is proposing is P0.3165 per kWh.

The FIT fund administrator expounded that the calculated FIT-All rate hike shall be on account of “the projected increase in kilowatt-hour sales (of RE facilities) due to anticipated economic recovery from the Covid-19 pandemic.”

The FIT-All is a separate line item in the electric bills being passed on to all Filipino consumers; and the collections are paid back as incentive mechanism to the RE developers.

The ERC has scheduled public hearings on the 2022 FIT cost recovery application of Transco on October 12, 19 and 26 this year to determine of compliance of jurisdictional requirements; expository presentation for Luzon, Visayas and Mindanao stakeholders; as well as pre-trial conference and presentation of evidence.

In the calculated FIT revenues for next year, it was stipulated that the bulk of P10.073 billion will go to biomass developers, to be followed by wind plant owners at P9.522 billion, then solar producers with estimated FIT revenues of P7.339 billion, while hydropower plants will corner P5.397 billion.

The targeted scale of revenues for next year will be higher by roughly P4.9 billion compared to the anticipated P28.358 billion worth of FIT revenues this 2021.

“The total FIT revenue was obtained by multiplying the eligible RE generation per technology…calculations were made on a per plant basis,” TransCo emphasized.

It added that the forecast cost recovery rate as applied to a particular RE plant “shall be based on whether the eligible RE plant operates in a grid where the Wholesale Electricity Spot Market is operational or not.”

The FIT fund administrator further noted that its FIT-All application for 2022 also factored in FIT differential accruing from 2015 to 2021, and that is inclusive of the effect of the over-recovery for 2021.

For year 2023, the forecast FIT cost recovery will be at the magnitude of P32.990 billion. Biomass developers will still have the lion’s share at P10.503 billion, wind will corner P9.525 billion, solar’s cut in the pie will be P7.296 billion, and hydropower facilities will have a share of P5.666 billion.

The FIT-All cost recovery as reflected in the bills of consumers is being applied annually with the ERC, but the final rate to be passed on will be based on a regulatory approval for a particular year.