STATE-RUN National Transmission Corp. (TransCo) said that the working capital allowance (WCA) or the buffer fund of the feed-in tariff allowance (FIT-All) system has been “depleted” following a suspension of collections.
Rogelyn T. Ronquillo, a manager with TransCo’s Regulatory Affairs Department, said TransCo needs to build up the buffer again, possibly via the proposed new FIT-All rate for 2025.
“On the increase in the FIT-All rate, one reason is that we have to establish the buffer fund which is fully depleted right this moment,” Ms. Ronquillo told BusinessWorld via text message.
The FIT-All is a uniform charge billed to on-grid electricity customers to support the development and promotion of renewable energy (RE). The WCA is part of the FIT-All and serves as buffer to address any default or delay in collections.
Payments are remitted to the FIT-All fund established and administered by TransCo. The fund goes towards paying eligible RE developers who have obtained fixed rates for electricity generated by their projects.
As the administrator, TransCo is tasked to file the rate application before the Energy Regulatory Commission (ERC) for setting the annual FIT-All rate.
For 2025, the state-run firm is seeking an increase to P0.1006 per kilowatt-hour (kWh) from the current P0.0838 per kWh to support RE plants registered under the current FIT system and the potential RE plants to be built under the Green Energy Auction.
Ms. Ronquillo said that the proposed FIT-All rate was computed based on the assumptions and formula provided by the ERC FIT-All guidelines.
“We assume a market price of P6/kWh and assuming this remains constant until 2025 and all other factors are constant, the computed FIT-All Rate will be enough for 2025,” she said.
TransCo said that the approval of the proposed 2025 FIT-All rate would allow it “to fulfill its duties and ensure timely payments of the FITs to FIT-eligible RE developers.”
“Currently, we only have the P3,500 maintaining balances of FIT-All accounts — this is because, the FIT-All rate was suspended for 14 months — and the new FIT-All rate was implemented in June 2024,” Ms. Ronquillo said.
Outstanding payables to FIT-All eligible RE developers amounted to P367 million as of Aug. 24, she said.
“For the remaining months of 2024, if the market price remains P6/kWh, the current rate can cope and pay the RE revenues,” Ms. Ronquillo said.
Earlier this year, the ERC decided to lift the 14-month collection suspension due to the projected deficit in the FIT-All Fund.
In a decision promulgated on March 20, the ERC authorized TransCo to collect a FIT-All equivalent to P0.0838 per kWh. This has increased from P0.0364 per kWh previously. — Sheldeen Joy Talavera
