Most power distributors, coops keep system loss in check — ERC

MANILA, Philippines — Majority of power distributors and electric cooperatives (ECs) in the country are now compliant with regulations on system loss, the Energy Regulatory Commission (ERC) said.

ERC chairman Agnes Devanadera said the commission strictly monitors the compliance of the distribution utilities (DUs) to the system loss cap.

In 2018, the ERC implemented a system loss limit of 6.5 percent to all DUs with the aim of lowering the electricity costs of consumers as mandated by the Electric Power Industry Reform Act (EPIRA) and improve the services of power distributors.

Under ERC rules, DUs are required to submit their  system loss reports monthly, including a sworn statement annual report which shows their respective systems loss, which is used by the agency to monitor their compliance.

There are two types of system loss: technical or losses during the transmission of electricity from the generation company to the  DUs and if the distribution system is efficient  there is a lower change of technical losses; and non-technical system loss due to  pilferage through "jumpers" or illegal connections, which are charged to customers under the system loss charge.

“The lowering of the system loss cap is a move to bring down the power rates and help electricity consumers mitigate the impact of rising costs of commodities and services. This will encourage DUs to improve their distribution system and facilities so that they adhere to the newly prescribed system loss cap,” said Devanadera.

Meanwhile, the Philippine Rural Electric Cooperatives Association Inc. (PHILRECA) said only five of the 121 ECs reached more than 20 percent system loss as of the fourth quarter of 2019; with 59 electric cooperatives having single-digit system loss ranging from 1.83 percent to 9.99 percent.

The House committee on good government and public accountability recently raised in a hearing concerns that some ECs' system loss reach as high as 20 percent, exceeding the 12 percent cap set by the ERC.

Based on the NEA's 2019 Compliance Report on the Performance of Electric Cooperatives, the average system loss of all ECs as of the fourth quarter was 10.16 percent, which is within the limit set by the ERC.

Of the 117 assessed ECs, 99 are within the system loss cap, 59 of which have single-digit level, while only 18 ECs or 15 percent exceeded the allowable system loss cap.

PHILRECA said the five ECs which exceeded 20 percent system loss were due to incurred problems such as pilferages, overloaded system, long distribution lines (which increase voltage drop), and delayed implementation of capital expenditure projects due to regulatory requirements, peace and order situation, and other concerns.

The ERC also debunked claims that Iloilo City’s new distribution utility, the Razon-led More Electric and Power Corp., had exceeded the system loss cap.

MORE Power said the system loss it passes on to consumers is only at six percent, clearly below the 6.5 percent cap.

The company has committed to its 65,000 customers in the city that it would continue to bring down its  system loss within the next three years as it implements its P1.8-billion modernization program.