FIT-All line item in electric bills to go down this year

By Myrna M. Velasco – January 24, 2020, 10:00 PM
from Manila Bulletin

The feed-in-tariff allowance (FIT-All) line item in the electric bills of Filipino consumers will go down this year, according to highly placed industry sources.

It was hinted that the calculated reduction is at ₱0.04 per kilowatt-hour (kWh), based on a reported decision already being routed for the final approval of the Energy Regulatory Commission; as well as for the promulgation and signature of the Commissioners and ERC Chairperson Agnes T. Devanadera.

With that level of reduction in the FIT-All, the resulting rate for that particular line item in the electric bills will be ₱0.1826 per kWh.

One of the factors that purportedly pulled down the FIT-All charge is the increase in clearing prices at the Wholesale Electricity Spot Market (WESM) last year – as the FIT-All calculation takes reference from it.

The FIT-All is the calculated per-kilowatt-hour charge being passed on in the consumers’ electric bills; and the collections being funneled through fund administrator National Transmission Corporation (TransCo) are subsequently paid to qualified renewable energy (RE) developers for their respective installations.

In last year’s FIT-All approval of the ERC, it noted that it factored in the discrepancy in the plant capacities used by applicant-TransCo versus the actual capacity of the FIT-eligible plants.

In documents filed with the ERC supporting TransCo’s application for FIT-All to be implemented this 2020, it has been shown that the targeted payout to RE developers would hover at ₱34.95 billion until next year’s reckoning date.

But given the leaner approved FIT-All charge to be issued by the ERC soon, the total amount of recoveries will also be down vis-à-vis the original estimates.

Across technologies, it was shown that the required cost recovery of wind installations would be at ₱3.296 billion; solar will be for ₱2.346 billion; biomass will be at ₱4.890 billion; and hydro at ₱3.350 billion.

For FIT differentials, estimated amounts to be recouped for wind facilities will be ₱6.987 billion; solar for ₱5.351 billion; biomass at ₱6.275 billion; and hydro at ₱1.936 billion.

TransCo emphasized that it will need to pass-on back-billings on the FIT differential component of the FIT-All charges – those that already piled up from regulatory years 2016 to 2019.

For next year, it is anticipated that the FIT-All charge may climb back as the FIT-qualified installations for biomass will increase as anchored on the extended deadline of project completions set forth by Energy Secretary Alfonso G. Cusi.

That deadline extension was as of December 31, 2019, but since there are biomass capacities not fully covered in the FIT incentive scheme based on the 250-megawatt installation cap earlier prescribed, the sector is now pushing for expanded capacity coverage also of the FIT subsidy for the technology.