System loss reduction plan gets mixed reviews
By Abigail L. Ho
Philippine Daily Inquirer
First Posted 14:53:00 09/05/2008
Filed Under: Energy & Resources, Electricity Production & Distribution
MANILA, Philippines -- The Energy Regulatory Commission’s proposal to reduce the system loss caps for both distribution utilities and electric cooperatives drew mixed reactions from industry stakeholders -- emphatic support from consumer groups and lukewarm reception from power distributors.
ERC executive director Francis Saturnino Juan said in an interview that there “were opposition and questions from the DUs and ECs, but there were also those who were in favor of the cap reduction, mostly the consumer groups and some ECs.”
Some stakeholders’ reactions were so intense that the possibility of court cases being filed if the ERC would insist on bringing down the caps to 8.0 percent from the current 9.5 percent for DUs and to 11.0 percent from the existing 14.0 percent for ECs was brought up.
ERC chair Zenaida Ducut earlier said Meralco’s suggestion was for a system loss cap of not lower than 9.0 percent.
But consumer group National Association of Electricity Consumers for Reforms said Meralco was being “insensitive” to the plight of its customers by resisting the ERC’s proposal to bring down the system loss cap.
System loss refers to the cost of electricity lost due to non-technical causes such as pilferage, or technical causes such as heat loss when electricity travels through power distribution lines.
Under the current set-up, DUs such as Meralco can pass on to customers up to 9.5 percent of their system loss. Anything beyond the cap is absorbed by the company.
For the ECs, Association of Philippine Electric Cooperatives Rep. Edgar Valdez said the reduction of system loss caps would be good for the ECs, in the sense that they would strive even more to make their operations more efficient.
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