Renewable energy subsidy OKd

The feed-in-tariff scheme created to grant incentives to renewable energy (RE) projects is now set for implementation, as the Energy Regulatory Commission approved the FIT allowance application of fund administrator National Transmission Corp., or Transco.

The ERC provisionally approved the rate of P0.0406 per kilowatt-hour (kWh) in FIT allowance for 2014 and 2015, which will be paid by all consumers.

In July, state-owned Transco, the administrator of the fund created from FIT collections, had submitted the application to the ERC.

The FIT-All charge will become another line item in the electricity bill, similar to the universal charge (which covers levies for missionary electrification in off-grid areas. Collectors such as Wholesale Electricity Spot Market and distribution utilities will remit the collections to the FIT-All fund to be administered by Transco through a state-owned bank.

The FIT-All charge will start appearing in electricity bills in January next year.

Currently, Transco wants Land Bank of the Philippines to be the host bank for the FIT-All.

Initially, the application with ERC was for 2014 and 2015 and the rate to be collected would be the average rate for the two years. This is to spread the impact over a longer period and ensure the rate will be as low as possible, NREB vice chairperson Ernesto B. Pantangco said. NREB endorsed Transco’s application for FIT-All.

From 2016 onward, the FIT-All fund will be set on an annual basis based on, among others: projected annual electricity sales, estimated required revenue of eligible RE plants, over- or under-recoveries in previous years, and administration costs.

In its petition, Transco said the granting of the provisional authority would allow it to pay the FIT rate to renewable energy developers on time, “thereby allowing their continued operations.”