Transco to temporarily do ‘labor of love’ on FIT rates

MANILA, Aug. 12 (PNA) — The National Transmission Corporation (TransCo) will temporarily apply a “labor of love” entry to its supposed charge on the Feed-in-tariff (FIT) rates in the collection for renewable energy (RE) developers until 2015.

TransCo said it will not charge on the Administration Allowance (AA), which is part of the total Feed-in-tariff (FIT) billing for renewable energy (RE) developers until 2015, according to NTC Compliance Monitoring Department Manager Dinna Dizon.

AA is the agency’s charge for handling the payment for RE developers.

”For the Admin Allowance, TransCo, for its initial filing, will charge zero. We’re free at the moment, it’s a labor of love until 2015,” Dizon told reporters Tuesday during a press conference at the Asya Restaurant in Quezon City.

Dizon said the RE developers are still to undergo the usual Wholesale Electricity Spot Market (WESM) settlement process.

The TransCo will serve as the bank for the FIT-all collection, but the name of the charge is still to be decided by the Energy Regulatory Commission (ERC). It will eventually be placed in the consumer’s monthly billing.

FIT rate is comprised of other charges such as FIT differential (FD), Cost Recovery Rate (CRR), Working Capital Allowance (WCA), Administration Allowance (AA), and Disbursement Allowance (DA) over the Forecast National Sales (FNS). Simply, it sets up the total billing components for the RE patronizers.

The FIT differential is the charge from the yearly expected RE generation multiplied to the current approved FIT rate by the ERC deducted to the expected RE generation times the cost recovery rate with the added “wildcard” of over/under recovery.

On the other hand, disbursement allowance is the payment given to the bank which will handle the transactions. It requires a government bank, with the choice of either the Land Bank of the Philippines or the Development Bank of the Philippines.

For the current year, the FIT differential is estimated at Php.02 kilowatts per hour (kWh), while the projected FD for 2015 costs Php.035 kWh.

Also, the WCA serves as the buffer fund on the point of shortfalls occurring on the part of the distribution utilities.

For 2014, the WCA component will charge Php.026 per kilowatt hour, for its requirement to build funds for the following year.

Further, the WCA is expected to charge lower at Php.002 kWh for 2015 and will further decrease to Php.0089 in 2016 due to the increase in the forecast annual payout at Php10.2 billion.

The ERC will certainly inspect the total collection of TransCo, which may also be oversight by the Commission on Audit (COA).

However, finalization of tax consultations with the Bureau of Internal Revenue (BIR) are still ongoing, which may alter the current proposed charge of FIT rate.

TransCo hopes the ERC will grant them provisional authority to collect the proposed FIT rate charge this August. (PNA)