(The Philippine Star) | Updated May 25, 2017 - 12:00am
MANILA, Philippines -
The Energy Regulatory Commission (ERC) is targeting to implement a lower system
loss cap by the fourth quarter this year to reduce the pass-on burden to
consumers.
The power regulator
will start conducting a series of public consultations next month to seek
inputs from industry stakeholders on the proposal to lower system loss charges,
ERC spokesperson Floresinda Digal said in an interview yesterday.
“Since we are a
quasi-judicial, quasi-legislative body, we need to do a public consultation
before we can implement a new cap and implementation mechanism on monitoring
system loss charges,” she said.
“Our target, which is a
very tight timeline, is to finalize (a new system loss cap) by fourth quarter
of this year. That is a very optimistic timeline, barring unforeseen
(circumstances),” Digal 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 the Anti-Electricity and Electric
Transmission Lines/Materials Pilferage Act of 1994.
The proposal for lower
system loss cap was drafted by a third party consultant the ERC tapped in
September 2016, Digal said.
The consultant will
review how the components of the system loss charge can be segregated into
technical and non-technical items as well as study updating the system loss
cap.
Technical system loss
is an inherent loss in the physical delivery of electricity while non-technical
system loss is a result of pilferage, human error like tampering of meters and
erroneous meter reading.
Under its proposal, the
consultant segregated the technical from the non-technical system loss. The
proposed cap for non-technical system loss of electric cooperatives (EC) is at
4.5 percent and 1.25 percent for privately-owned distribution utilities (DUs).
Meanwhile, the
technical loss cap will have a formula and will range between 2.5 percent and
seven percent.
“These are all subject
to public consultations,” Digal said.
Currently, the ERC has
set the system loss cap at 8.5 percent for privately-owned DUs and 13 percent
for EC, which can be passed on to consumers through a line item in their
monthly electricity bills.
Recently, Sen. Sherwin
Gatchalian urged ERC implement a periodic review of the system loss program to
encourage efficiency among power distributors.
The lawmaker also said
the power regulator should fast-track the assessment on the program to
facilitate the early implementation of new system loss caps that will reduce
the charges that private DUs and ECs can pass on to consumers.
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