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Other charges seen pushing up RE’s FIT-All rate to P0.04057/kwh

The inclusion of other allowable charges in the feed-in-tariff allowance (FIT-All) to be passed on in the electric bills of on-grid consumers will push this rate up to P0.04057 per kilowatt hour (kwh), based on pre-filing presentation made by the National Transmission Corporation (TransCo) to the Energy Regulatory Commission.

The FIT differential alone will amount to P0.03 per kwh on year 2015. The initial calculation of P0.02 per kwh which was the basis of the initial P0.33 per kwh FIT-All that was floated was just for year 2014 when most of the renewable energy (RE) capacities will not be synchronized to the grid yet and collections may just cover five months if the ERC issues provisional approval on the petition.

“TransCo proposes a FIT-All rate of P0.04057 per kwh for 2014 and 2015,” the company has stipulated in its application with the ERC.

As estimated, FIT differential for year 2014 had been set at P0.02169 per kWh; and P0.03553 per kWh in 2015; or an average of P0.03160 per kWh for the two years.

The company has factored in the total FIT differential on the prescribed years; working capital allowance, administration allowance and disbursement allowance.

The three other charges will amount to roughly P0.01 per kwh if integrated into the whole FIT-All rate which will then be reflected as separate item in the consumers’ electric bills.

To come up with the FIT differential, TransCo noted that it used as reference a 3-year compounded annual growth rate (CAGR) of energy sales based on data culled from the Department of Energy.

The forecast national sales (FNS) of electricity for the years 2014 and 2015 as employed by TransCo in its calculation are as follows: 64.817 billion kilowatt hours for 2014; and 68.016 billion kWhs for 2015.

As defined, FNS shall refer to the “estimated total kilowatt-hours of electricity billed to consumers who are supplied with electricity in on-grid areas in the Philippines for a given year.”

The FIT-All differential represents “the difference between the forecast applicable FIT rate (in a prescribed year) that each eligible RE plant is forecasted to receive for each kWh delivered.”

It shall also factor in “the forecast applicable cost recovery rate as determined under the (FIT) guidelines, multiplied by the projected annual energy generation from eligible RE plant for the (prescribed) year.”

Capacity installation caps were set by the energy department for each RE technology that must be incentivized with the FIT rates and such were partly the basis for the FIT-All calculation.