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Manila Bulletin devider Business devider FIT-All fund for RE in deficit by February

FIT-All fund for RE in deficit by February

Suspension of subsidy collection lifted

Published Jan 18, 2024 03:22 pm

At A Glance

  • It is highly critical that the warranted incentives for the FIT-qualified RE capacities be consistently honored, and any unwarranted stoppage of payments will not only turn off investors, but it may also trigger legal cases that may be filed against the government for reneging on its contractual obligations with the project-sponsors and their lenders.
  •  

The feed-in-tariff allowance (FIT-All) fund is seen teetering on deficit by February billing, hence, that prompted the Energy Regulatory Commission (ERC) to re-impose next month the collection of the P0.0364 per kilowatt hour (kWh) subsidy for the qualified renewable energy (RE) projects.

“As the Commission reevaluated the balance of the FIT-All fund as of January 5, 2024 - inclusive of the cost recovery revenue (CRR) collections in November 2023, the ERC found that the projected FIT-All Fund would be in deficit in the February 2024 customer monthly billing,” the regulatory body has stipulated.

Relative to that development then, the ERC emphasized that it “resolved to approve and adopt the lifting of the suspension and to resume the collection of the FIT-All charges.”

The temporary deferment of collection for the FIT-All as incentive to RE projects had been in force since December 2022; and that lingered as a policy until this year’s January billing – or more than a year since the break in payment had been implemented.

It is highly critical that the warranted incentives for the FIT-qualified RE capacities be consistently honored, and any unwarranted stoppage of payments will not only turn off investors, but it may also trigger legal cases that may be filed against the government for reneging on its contractual obligations with the project-sponsors and their lenders.

“The ERC resolved to lift the suspension on the collection of the FIT-All starting the billing month of February 2024 after more than a year of suspending the collection of the FIT-All to provide relief to Filipino consumers,” the industry regulator has reiterated.

The re-implementation of the FIT-All collection had been decided via ERC Resolution No.01, series of 2024, that was issued on January 16 this year, reiterating that its ruling had been “due to the looming deficit in the projected FIT-All Fund.”

To recall, the momentary halt in the FIT-All pass on had been intended then to ease the burden of consumers – especially in the Christmas season of 2022; when consumers were still reeling hard from the financial blow of the Covid pandemic that had likewise been compounded by the dilemma of rising inflation rate.

As determined by the ERC at the time, the FIT-All fund was relatively on a healthy balance, but that narrative shifted into the negative territory following a year of non-collection.

Onward, the FIT-All fund will not only cover payments to RE developers that were qualified under the FIT policy regime of industry, but even the capacities awarded under the green energy auction (GEA) program being administered by the Department of Energy. 

 

Related Tags

renewable energy Department of Energy (DOE) Energy Regulatory Commission FIT-All electric bills
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