ERC directs electric co-ops to cut systems losses

The Energy Regulatory Commission (ERC) has ordered electric cooperatives (ECs) to immediately reduce their systems losses to help curb rising electricity rates in the provinces.

In a regulatory advisory, the ERC said around 44 percent of the country’s 121 ECs had passed on hefty energy charges to consumers while sharp increases from the previous quarter were observed among 22 ECs.

These figures were based on the ECs’ residential rates for September last year. The increase in electricity rates in the third quarter last year was primarily due to the high cost of fuel—particularly coal—used to operate power plants.

But the impact on the monthly billings could be mitigated by reducing the systems loss charges passed on to consumers. Systems loss refers to unbilled electricity or electricity lost due to pilferage or through the transmission and distribution process.

To compensate for the systems loss, power distributors are authorized to pass on part of the cost to consumers. However, the ERC advisory said some ECs have exceeded the 12-percent threshold for systems loss charges set by the ERC.

Thus, all ECs were advised to “strengthen and strictly implement” their respective systems loss reduction programs (SLRP).

Accordingly, ECs must identify distribution system losses in their networks to determine the most effective SLRP.

The ECs were also advised to review their power supply agreements and renegotiate with their respective power suppliers to trim over-contracted power supplies, which will also help reduce power bills.