ERC Approves a Lower Feed-in Tariff Allowance
The Energy Regulatory Commission (ERC) approved the application of the National Transmission Corporation (TransCo) for the Feed-In Tariff (FIT-All) Allowance for Calendar Year 2019. The ERC’s approval, which was embodied in a Decision issued in relation to ERC Case No. 2018-085RC, authorized TransCo to collect a FIT-All rate equivalent to PhP0.0495/kWh. “The ERC-approved 2019 FIT-All is lower by PhP0.1976/kWh vis-à-vis TransCo’s proposed rate of PhP0.2471, and will reflect a PhP0.1731/kWh reduction from the current (2018) FIT-All rate of PhP0.2226/kWh. The ERC, in computing the 2019 FIT-All rates, made use of the actual generation billed and the actual cost recovery rate from January until August 2019, among others”
, ERC Chairperson and CEO Agnes VST Devanadera clarified.
The 2019 FIT-All considered the FIT-eligible plants with Certificate of Compliance for FIT (FIT COC) and the 2019 forecasted incoming Run-of-River (ROR) Hydro and Biomass plants. This is in view of the extension by the Department of Energy (DOE) of the installation target for ROR Hydro and Biomass up to 31 December 2019 or its full subscription, whichever comes first. Moreover, TRANSCO in its manifestation estimated an under-recovery in the amount of PhP122.7 Million. The Commission, however, used the actual over-recovery reflected in the books of TRANSCO as of 7 October 2019 amounting to PhP6.7 Billion. “The approved 2019 FIT-All rate will be charged to all on-grid consumers supplied with electricity through the distribution or transmission network starting the immediately succeeding billing period following TransCo’s receipt of the ERC Decision. The 2019 FIT-All will result to a reduction in the existing FIT-All rate and will increase the consumers’ purchasing power”
, ERC Chair Devanadera concluded.
The FIT-All mechanism was established pursuant to the Renewable Energy Act of 2008 which aims to spur the development of emerging renewable power sources such as wind, solar, run-of-river hydro, and biomass facilities. The FIT-All is a uniform charge in PhP/kWh payable by all electricity users that is calculated and set annually. Distribution utilities (DUs), the National Grid Corporation of the Philippines (NGCP), and Retail Electricity Suppliers (RES) serves as collecting agents, and the proceeds go to the FIT-All Fund which is being administered by the TransCo.