Transco seeks lower FiT-All for 2019

THE National Transmission Corp. (Transco) said it would seek a lower feed-in-tariff allowance (FiT-All) for 2019 compared to its 2018 application pending before the Energy Regulatory Commission (ERC).

“Our deadline is to file on or before end of July. Our projection is lower than 2018 because by then, we expect the deficit to be lower,” Transco President Melvin Matibag said.

FiT-All is billed to all on-grid electricity consumers, which appears as a separate line item in power distributors’ bills. The amount is meant to cover payments to renewable energy (RE) developers who are assured of a fixed rate per kilowatt hour (kWh) for electricity generated by their projects over a period of 20 years.

The ERC had just approved a FiT-All rate of 25.63 cents per kWh for 2017. The rate, which will only be implemented starting with June 2018 bills, is higher than the 22.91 cents per kWh rate applied by Transco, administrator of the FiT-All fund.

For FiT-All 2018, TransCo sought a FiT-All rate of P29.32 per kWh. This is still pending with the ERC.

The ERC said the recently approved FiT-All rate for 2017 is sufficient to cover the obligations. Matibag agreed, saying this will help address the inability of the FiT-All fund to pay in full the claims of FiT-eligible generators.

“By end of this year, the claims will go down to P4.6 billion from P6.1 billion at end-2017. That is why we are also going to ask for a lower FiT-All for 2019 than what we asked for 2018,” Matibag said.

The ERC decision for 2017 FiT-All rate ruled the total RE claim as of February 5 this year, stood at P40.12 billion. Of the amount, only 82 percent has been paid, while 18 percent of P7.378 billion remains unpaid. Accrued interest has ballooned to P527 million. This is 195 percent higher than the January 2016 interest level when the commission approved the 18.30 cents kWh FiT-All 2016 rate.

Consumer advocate group Laban Konsyumer Inc. (LKI) earlier asked the ERC to halt the collection of the 2017 rate, saying the resolution should be set aside “for being null and void on the ground of lack of jurisdiction,” and “to suspend and/or stop immediately the collection of the FiT-All.”

“Aside from being void ab initio and without legal effect, the assailed decision must be reconsidered because it granted a higher FiT-All rate of P0.2563 per kWh despite Transco’s prayer for the approval of a FiT-All rate of P0.2291 per kWh, which is an act of grave abuse of discretion tantamount to lack or excess of jurisdiction on the part of this Honorable Commission,” LKI President Victorio Mario Dimagiba said.

When sought for comment, Matibag said LKI should understand TransCo does not earn from administering the FiT-All. “They should not be angry with us. In fact, they should help us. We do not earn anything from this. I have this idea that RE developers must pay us, similar to banks that charge processing fee, because our people work hard on it. But we won’t push this if RE developers will just pass this on to consumers.”

Matibag said the backlog in payments owed to RE developers was caused by a combination of a lot of factors though not attributable to Transco.  “We are very much concerned and we are doing our best to resolve the issue. We are also looking for other options to address the backlog,” he said.  “With the ERC approval, we can somehow address the backlog on the payment of FiT-All. We want to help both consumers and RE developers not to be burdened by reason of the delay in paying of the FiT.”

Matibag was referring to earlier proposals to ask financial assistance from the World Bank (or the Asian Infrastructure Investment Bank to be able to pay RE developers).

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