Meralco targets lower system loss by year-end

 Danessa Rivera - May 9, 2021 - 12:00am

https://www.philstar.com/business/2021/05/09/2096835/meralco-targets-lower-system-loss-year-end

MANILA, Philippines — Manila Electric Co. (Meralco) is targeting to reduce its system loss by year-end as it banks on increased economic activity and intensified drive against illegal connections.

Meralco senior vice president and head of networks Ronnie Aperocho said the power distributor is seeing some improvement in its system loss numbers as more commercial and industrial customers start operating despite the pandemic.

The company has also resumed addressing illegal connections, which contributed to the improving system loss level.

System loss refers to unbilled power caused by pilferage and physical loss of energy when electricity passes through distribution lines.

“With the shares of commercial and industrial customers in our total sales mix improving with our saturation drives against illegal connections getting back to business as usual and unbilled volumes being reduced significantly, we are seeing improving improvements in our system loss numbers starting April and onwards and looking forward to a much lower system loss by year-end, lower than our year-end system loss figures in 2020,” Aperocho said.

As of end-2020, Meralco’s system loss is at 6.08 percent, which is 0.54 percentage point higher than 5.54 percent at end-2019 due to unbilled sales and the shift in sales mix toward higher loss-to-serve residential segment. It was way below the system loss cap at seven percent for privately-owned distribution utilities set by the Energy Regulatory Commission (ERC) that year.

Meralco’s average system loss rose further in March to 6.14 percent, which is 0.72 percentage point higher than the 5.42 percent recorded in the same period last year.

While the system loss increased, it is still below the system loss cap at 6.5 percent for privately-owned distribution utilities set by the ERC starting this year.

Aperocho said the increase was primarily due to the huge shift of consumption to the residential segment, which increased from 30 percent pre-pandemic to 38-40 percent share during the pandemic.

“The residential segment is served from secondary lines which have higher loss-to-serve compared to the commercial and industrial segments which reduced consumption during the community quarantine,” he said.

The residential customers get the lowest voltage and the distribution system serving this segment registers high system loss whereas the commercial and industrial customers get higher voltage translating to lower system loss, Meralco head of utility economics Lawrence Fernandez said.

“Since there was a reduction in operations in commercial, industrial customers [due to the pandemic], then household went on work-from-home and study-from-home setup, the commercial and industrial segments’ share in consumption dropped while that of residential rose,” he said.

The quarantine restrictions prevented Meralco from deploying personnel to deal with illegal connections.

“Our saturation drive against illegal connections were also hampered by the constraints in workforce deployment and the scarcity of police escorts as most of our police personnel were deployed to man boundary or community checkpoints. There’s also an unbilled consumption of 31.6 gigawatts,” Aperocho said.