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FIT fund shortfall seen

By Myrna M. Velasco

Despite the ₱7.325- billion balance reported as of end- May, the feed-in-tariff allowance (FIT-All) fund for renewable energy (RE) developments is projected to suffer deficiency this year if the per-kilowatt-hour (kWh) collection for it would not be granted an increase by the Energy Regulatory Commission (ERC).

A report submitted by the National Transmission Corporation (TransCo) to the Joint Congressional Energy Commission (JCEC), stipulated “a possible shortfall of the FIT-All fund within the year should there be no upward adjustment on the prevailing FIT-All rate of ₱0.0495 per kWh.”

It has to be noted that when the enhanced community quarantine (ECQ) was enforced by the government for more than two months because of the coronavirus pandemic, TransCo opted to suspend collections of FIT-All in the electric bills of consumers.

Even with no collection for the period, the FIT fund administrator-firm said it made full payments to the eligible RE developers – amounting to ₱2.404 billion on April 5 for the March billing; and ₱1.750 billion on May 5 for the April billing or a total of ₱4.154 billion within that two-month billing cycle.

From May to December this year, TransCo noted that its targeted collections relative to the prevailing FIT-All rate would amount to ₱300 million monthly or an aggregate ₱2.4 billion until year-end.

The company similarly calculated that FIT differen¬tial on the pass-on of such RE subsidy to the consumers would hover at ₱1.4 billion monthly.

The FIT-All collection of TransCo had been among those mandated by the Department of Energy (DOE) and the ERC to be deferred for four months or until September this year – on top of the two months in April and May billings that it had already put off for pass-on in the electric bills.

On the forecast shortfall this year, TransCo noted that one contributing factor is “the observed low market rates (in the Wholesale Electricity Spot Market) ranging from ₱2.00 per kWh to P3.0 per kWh for the last three months;” which redounds to an average effective rate of ₱2.60 per kWh.

The other triggering facets had been the suspension of the FIT-All collections during the ECQ; the reduced electricity consumption which started in March and may persist until December this year.


Source: Manila Bulletin (https://business.mb.com.ph/2020/05/31/fit-fund-shortfall-seen/)

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