FIT-All interest charges swell to P527 million (Due to ERC’s delayed approval)

By Myrna M. Velasco – December 28, 2017, 10:00 PM
from Manila Bulletin

The interest charges to be shouldered by consumers due to delayed regulatory approval of the feed-in-tariff allowance (FIT-All) application of the National Transmission Corporation (TransCo) will swell to P526.7 million, according to Energy Regulatory Commission (ERC) Chairperson Agnes T. Devanadera.

That will be more than double the P230-million FIT-All interest charges that the ERC had reported to the Joint Congressional Power Commission (JCPC) in May, 2017.

“The accrued interest on FIT-All will be P526.7 million and this will all be passed on to the consumers. The longer we do not act on this, the more consumers will suffer,” Devanadera said, while laying down the ERC’s predicament over the suspension order hurled against its four commissioners.

TransCo President Melvin A. Matibag has apprised reporters that the company’s lag on collections stretches seven  months equivalent or about P8.0 billion to P9.0 billion as of December 2017.

The company lodged application for FIT-All rate adjustment to P0.2932 per kilowatt-hour (kWh) for calendar year 2018, but it remains pending for regulatory approval.

Essentially, that will hike the FIT-All charge as a separate item in the electric bills by P0.1102 per kWh from the prevailing charge of P0.183 per kWh.

TransCo previously indicated that the petitioned for adjustment in the FIT-All will result in total collections of P24.9 billion.

The FIT-All line item in power bills serves as an incentive scheme for the FIT qualified renewable energy (RE) projects based on the endorsement of the Department of Energy (DOE) and as certified by the ERC.

With the lag in collections, several RE developer-firms are already complaining of strain in meeting their financial obligations with lenders as well as in sustaining their cost of operations.

The ERC’s attention had already been called on the mounting interest charges, but since the last legislative inquiry on the matter, not much had changed so far on regulatory actions on the pending FIT-All petitions of the fund administrator.

And with the Commission’s messy situation at present, it will turn more problematic to all relevant parties that have pending applications for regulatory approvals.

TransCo tried sorting out a “stop gap measure” on how it can temporarily fend off its FIT-All collections shortfall, but it has yet to make public announcement if it had been successful on the loan procurement it has been working on with the World Bank Group.