The Energy Regulatory Commission (ERC) has extended for another six months its mandate on the suspension of "interest payments" for feed-in-tariff allowance (FIT-All), a rate component in the electric bills being dispatched to consumers.
The regulatory body said the non-payment of interest or penalty for the FIT-All charge shall be applied both for partial and delayed settlements for such subsidy that is funneled to renewable energy (RE) capacities – and the extension shall be from November this year until April 2022.
The FIT-All charge is a separate line item in the power bill and this is collected from all electricity consumers; and subsequently paid as incentive to the capacities supplied by FIT-eligible RE facilities.
The ERC said its decision to stretch the moratorium on FIT-All interest payments “was anchored on projection of a shortfall in the FIT-All fund starting November 2021 to cover the payments to the eligible RE plants.”
As explained by ERC Chairperson Agnes T. Devanadera, “we have decided to extend the moratorium on the imposition of interest for the partial or delayed payment of the actual FIT revenue for another six (6) billing periods starting November 2021 to April 2022.”
For that edict, she specified that the eligible RE plants “shall not impose any interest or penalty for any partial or delayed payment of the actual FIT revenue to them by the National Transmission Corp. (TransCo) during the said extension period of the moratorium.”
In incentivizing the RE developers under the FIT system, it is TransCo that has been designated as fund administrator, hence, that is the state-run entity in charge of settling the FIT claims of the qualified RE firms.
The FIT-All charge in particular is passed on in the monthly electric bills and collected from consumers by front-lining service providers, such as the private distribution utilities and the electric cooperatives; then the collections will have to be remitted to TransCo.
The ERC reiterated that its verdict to extend the moratorium on FIT-All interest or penalty is its way of “showing support to the government’s directive to start opening the economy, and the need to help the public to recover from the severe effects of the coronavirus pandemic in order to avert further hardships and burden to electricity consumers.”
The regulatory body further noted that it invoked a provision in the FIT rules, which stipulates that: “where good cause appears, the ERC may allow an exemption from any provision of these rules, if such is found to be in the public interest and is not contrary to law or any other related rules and regulations.”
Devanadera stressed “we are temporarily relaxing the application of our FIT Rules only for the said moratorium period.”
She expounded that “if the moratorium on the FIT-All will not be extended, the consumers will bear the brunt of paying these penalties and interests should the FIT-All fund be insufficient to pay the eligible generators.”