Lawmaker hits P6.6B FiT payment backlog

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A lawmaker on Friday scored the regulatory inaction of the Energy Regulatory Commission (ERC) that has resulted in a whopping P6.6 billion backlog in feed-in tariff (FiT) rate payments owed by the government to renewable energy developers for 2016, including P230 million in interest payments alone.

Senator Sherwin Gatchalian, the chairman of the Senate Committee on Energy, linked the payment backlog to the sluggish action of ERC commissioners on applications of the National Transmission Corp. (TransCo) to collect higher FiT-All rates aimed at augmenting its subsidy to eligible RE developers and allowing it to pay its obligations.

“I hate to say it, but because of the delays of ERC, we will be paying P230 million in interest payments. That’s why I am quite adamant in getting a definitive timetable (when the applications will likely be approved) from you [ERC] because I know that the amount will grow bigger. Every day it piles up,” Gatchalian said during a hearing of the Joint Congressional Power Commission (JCPC) on the status and implantation of the provisions of the Renewable Energy Act.

“In line with attracting investors and promoting RE…we will never get serious investors if we don’t fulfill our contractual obligations, and FiT-All is one of them,” he added.


In December 2015, Transco sought to increase the FiT-All rate for 2016 to 12 centavos per kilowatt-hour (P.12/kWh). Before the application could be approved, Transco filed another application in December 2016, this time asking to further hike the rate to 22 centavos per kilowatt-hour (P.22/kWh).

ERC officials told members of the JCPC that it is set to issue its final approval of the 2016 application on June 9. On the other hand, they are also set to convene the first jurisdictional and expository meeting for the 2017 rate application on May 15, Tuesday, with approval by September 2017.

“These unwarranted delays in the ERC approval is the reason why TransCo has not been able to pay the RE developers. And because of these delays, we have to pay consequential costs,” Gatchalian stressed.

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