Transco narrows down list of banks for FIT fund
The National Transmission Corp. (Transco) is set to choose a state-run bank as trustee of the fund to be collected from consumers utilizing renewable energy (RE) capacities.
“It’s either Landbank or DBP,” Transco president Rolando Bacani said, referring to the institutions being considered as trustee of the fund to be pooled from feed-in-tariff (FIT) charges.
State-run Transco already has asked both banks to draft their respective proposals. As FIT administrator, the transmission firm will decide on the matter by May, Bacani said.
As mandated by the Renewable Energy Act of 2008 (RA 9513), the transmission firm needs a partner bank to manage the FIT Allowance (FIT-All)—the uniform peso-per-kilowatt-hour (kWh) charge to be collected from RE end-users.
The FIT-All will be collected and placed in a fund with the chosen state bank. Transco will manage the fund.
Transco has to choose a trustee bank before it can apply for the setting of the annual FIT-All with the Energy Regulatory Commission (ERC). The application will include the formula in the computation of FIT-All, Bacani told reporters.
Article continues after this advertisementThe government bank to be chosen will be removed from the National Renewable Energy Board (NREB)—a recommending body formed in 2009 to implement renewable energy policies and action plans of the Department of Energy (DOE). This will provide balance in the FIT implementation, Bacani explained.
Article continues after this advertisementAsked which RE project would likely be the first to benefit from the FIT scheme, Bacani said it could be the biomass project on Negros island.
The 18-megawatt (MW) stand-alone biomass power plant of San Carlos BioPower Inc. is expected to be completed in April.
While the FIT-All may not be in place yet, Bacani said, San Carlos BioPower can conduct dry runs or get bilateral contracts while waiting for the implementation of the guaranteed RE rates.
In 2012, the Energy Regulatory Commission (ERC) designated Transco [endorsed by the NREB] to be the administrator of the FIT fund.
There had been a debate on how the FIT funds should be categorized, with some sectors saying that these should be held as “public subsidy.” As a result, Transco was chosen to administer the fund instead of privately owned National Grid Corp. of the Philippines (NGCP).
NGCP of the Sy family operates and manages Transco’s power transmission system, which links power plants with electricity utilities across the Philippines. However, Transco retains ownership of the transmission assets.
