Transco endorsed as feed-in-tariff charge collector

MANILA, Philippines—The National Renewable Energy Board (NREB) has formally endorsed the state-run National Transmission Corp. (Transco) to become the administrator of the charges that will be collected from all power consumers for the use of renewable energy.

NREB chairman Pedro Maniego Jr. said the letter dated September 11 has reiterated their position that Transco should be the administrator of the so-called feed-in-tariff allowance (FIT-All) in compliance with the request of the Energy Regulatory Commission to confirm in writing such proposal. This proposal was already aired as early as May this year, he added.

It has been deemed more proper to delegate Transco as the FIT-All administrator rather than the National Grid Corp. of the Philippines (NGCP) as the proceeds to be collected from all power consumers are considered public funds.

“According to the opinion provided to NREB by the Office of the Government Corporate Counsel, FIT-All is deemed [a] public fund and thus, must be administered by a government entity, according to law,” Maniego explained.

The ERC is set to begin this month the formal discussions on the rules governing the FIT-All, a critical component of the feed-in-tariff scheme, a move expected to fast-track the expected investments in the renewable energy sector and help the Philippines retain its position as the most developed RE market in Southeast Asia.

The FIT-All shall approximate the total payments required to be made to all renewable energy developers that will be entitled to the FIT rates. To recall, the FIT rates were only issued in July this year, a welcome development for developers as these rates would assure eligible investors of fixed cash flows within a 20-year period.

A July 2012 paper titled “Meeting the Energy Challenge in South East Asia” by Ipsos Business Consulting earlier warned that the Philippines may be in danger of “dropping behind” its five other neighbors in the Asean given the delays in the implementation of the necessary mechanisms that will drive the growth of the renewable energy industry.

The Philippines is still by far the most developed market with an existing capacity of 5,439 megawatts, but the situation may change rapidly as all Asean governments are committed to developing renewable energy sources of energy.