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Consumer group questions TransCo’s FiT overpayment

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A CONSUMER GROUP has questioned the P36.53 million overpaid by National Transmission Corp. (TransCo) to renewable energy (RE) companies for the power they produced under the feed-in tariff (FiT) system, and sought a disclosure of an updated figure while pushing for changes in how the amount is being computed.

“What was the basis of TransCo’s computation of overpayment?” Victorio Mario A. Dimagiba, president of Laban Konsyumer, Inc., said in an e-mail sent to reporters.

Based on documents from the Energy Regulatory Commission (ERC), the discrepancy arose after TransCo used the capacity mentioned in the FiT certificate of compliance issued by the regulator to the RE companies, which turned out to be larger for some of them than what was listed in the certificate of endorsement issued by the Department of Energy (DoE).

The DoE issues its endorsement to determine which among the power plants were first to dispatch energy to the grid and qualified to receive the FiT or the guaranteed fixed payment. The so-called “race to FiT,” which capped the installation target for each RE sources, hastened the development of power generation projects.

The DoE endorsement becomes the basis for the certificates of compliance issued by the ERC, which are in turn reviewed by TransCo before issuing a renewable energy payment agreement to the developers.

“How can we be sure that the overpayment should not actually be larger than estimated by TransCo as no details were provided?” Mr. Dimagiba said. “What is TransCo’s latest estimate of the overpayment amount?”

Mr. Dimagiba also asked whether ERC should initiate a rule-making process to amend its own FiT rules to clarify that TransCo should compute tariff payments based on DoE’s certificate of endorsement, instead of ERC’s certificate of compliance.

In June, the ERC resolved the overpayment issue by directing TransCo to offset the amount given to the generation companies on a staggered basis for one year for those that received P1 million or more, and a one-time offsetting for amounts below P1 million.

The feed-in tariff system offers cost-based compensation to renewable energy generators, providing price certainty and long-term contracts that help finance investments in clean energy.

Sought for comment, Sharon O. Montañer, who heads ERC’s financial and administrative service, said there was no increase in the amount after the agency’s order in June. She added that ERC had since used the DoE figure in the computation.

She said TransCo would simply offset the overpayment from the future claims of the renewable energy companies. — V.V. Saulon