Regulator approves a lower feed-in tariff allowance
By Lenie Lectura – January 4, 2021
from Business Mirror
THE Energy Regulatory Commission approved with modification, the application of the National Transmission Corp. (TransCo) for the approval of the Feed-in Tariff Allowance (FIT-All) for Calendar Year 2020. In its Decision, the ERC authorized TransCo to collect a FIT-All equivalent to P0.0983 per kilowatt-hour (kWh) effective in the next billing cycle.
“The ERC-approved FIT-All for Calendar Year 2020 in the amount of P0.0983/kWh is lower by P0.1295/kWh as compared to TransCo’s proposed rate of P0.2278/kWh,” ERC Chairman and CEO Agnes VST Devanadera said. “We came up with a lower FIT-All rate in view of the fact that the Commission used some actual figures as bases in our computations, among others.”
The ERC’s calculation resulted to a lower FIT-All rate vis-à-vis TransCo’s proposed rate in view of the variance in the computation of FIT-All components particularly the following: FIT Differential; working capital allowance; administration allowance; disbursement allowance; and, forecast national sales.
Specifically, the following parameters under the FIT Differential mainly contributed to the significant difference on ERC’s calculation to TransCo’s capacity under FIT (MW); forecasted generation for 2020; forecast cost recovery rate (FCRR); and, amount of over-recoveries.
TransCo used the FIT-eligible capacity of 1,375.78 MW from the list of DOE as of July 2019 whereas the ERC used the DOE list with Certificate of Endorsement as of December 31, 2019. Further, TransCo forecasted the generation for 2020 at 4,098,632,000 kWh; the ERC used the combination of actual generation from January to March 2020 and forecasted generation from April to December 2020, equivalent to 3,414,953,807.2 kWh.
On the FCRR, TransCo used the 36-month load weighted average price for Luzon and Visayas for the period April 2016 to March 2019 and used the blended generation rates for Mindanao. The ERC used the combination of actual cost recovery rate for January 1 to March 31, 2020 and the FCRR from April 1 to December 31, 2020. Furthermore, TransCo also included the over-recovery amount of P3.5 billion while the ERC made use of the amount of P7.3 billion as of May 5, 2020.
In its decision, the ERC also directed TransCo, the distribution utilities (DUs), retail electricity suppliers, the National Grid Corp. of the Philippines and the Philippine Electricity Market Corp. to make available their records to the Commission, pertinent to the implementation of the FIT-All as part of the FIT-All audit that shall be immediately undertaken by the Commission.
Furthermore, TransCo must ensure that the FIT-All Fund and its sub-accounts operate as intended, as stated in the FIT-All Guidelines. It must also provide the Commission with an update or report on the status of drawn or borrowed amount from the FIT differential account and payments made thereto within 30 days from receipt of the Commission’s decision.
“The implementation of the FIT has increased supply of renewable energy by 1,262.491MW as of December 28, 2020,” Devanadera added. “We have witnessed the reduction in the price of electricity in the WESM (wholesale electricity spot market) because of the entry of this additional renewable energy capacity as a result of the merit order effect. The FIT-All collection ensures not just the sustainability of this additional capacity, but also attracts additional investments for a clean and sustainable energy industry.”
