ERC urged to hold periodic review of system loss

MANILA, Philippines - The Energy Regulatory Commission (ERC) should implement a periodic review of the system loss program to encourage efficiency among power distributors, Sen. Sherwin Gatchalian said.

“The ERC should have a regular mechanism that will study system loss every so often,” the lawmaker said.

System loss refers to unbilled power caused by pilferage and physical loss of energy when electricity passes through distribution lines, which can be passed on to consumers as stated under Republic Act 7832, or Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994.

This can be passed on to consumers through a line item in their monthly electricity bills.

The present system loss cap is 8.5 percent for privately-owned distribution utilities and 13 percent for electric cooperatives (EC), which has been in place since 2008.

“The last caps are still in the 2008 levels. The ERC can do a review of the program at shorter intervals. The utilities are now more efficient in power generation and distribution because they are already equipped and very knowledgeable on how to reduce their system losses,” Gatchalian said.

Currently, the ERC is assessing the system loss program. Next month, it will start public consultations and group discussions on the proposed new caps submitted by a third party that reviewed documentary submissions of distribution utilities and electric cooperatives.

Once approved, the new system loss cap will take effect in 2019 for private distribution utilities, and in 2020 for electric cooperatives. After that, the next scheduled assessment will be after four years for private utilities, and six years for rural cooperatives.

However, Gatchalian said ERC should fasttrack the assessment on the program to facilitate the early implementation of new system loss caps that will reduce the charges private distribution utilities and electric cooperatives can pass on to their consumers. – With Paolo Romero