Through its legal team, the agency will study the possibility of removing system loss charges in electricity bills, DOE spokesperson Pete Ilagan said during a forum yesterday. Philstar.com/File Photo
MANILA, Philippines – The Department of Energy (DOE) is studying the possibility of removing the burden on consumers to pay for system loss charges.
Through its legal team, the agency will study the possibility of removing system loss charges in electricity bills, DOE spokesperson Pete Ilagan said during a forum yesterday.
He said the decision to undertake a study came after the DOE received reports some distribution utilities (DUs) have system loss going beyond the cap set by the Energy Regulatory Commission (ERC).
“According to (DOE) Secretary Alfonso Cusi, why should the burden of system loss be passed on to consumers when it can be shouldered by utilities, which is a common practice in other countries,” Ilagan said.
System loss refers to unbilled power caused by pilferage and physical loss of energy when electricity passes through distribution lines.
Passing on these charges to consumers is allowed under Republic Act 7832, or the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994.
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The ERC has set the system loss cap at 9.5 percent for privately-owned DUs and 13 percent for electric cooperatives (EC), which can be passed on to consumers through a line item in their monthly electricity bills.
Ilagan said the review will identify whether the system loss cap is being followed by power distributors.
“The results of the study will form part of the DOE’s position on how this can be recommended to Congress, which allowed the pass-on charges to consumers under the law,” he said.
As for the country’s largest power distributor, Manila Electric Co. (Meralco) has been able to bring down its system loss ang generate savings of over P20 billion for customers, company vice president Ferdinand Geluz said in the same event.
Currently, Meralco’s system loss is 6.46 percent.
“We’ve been very effective [in reducing system loss with the help of] the local government units (LGU) in terms of policing areas prone to pilferage. Another help is of course the consumers’ help in policing, reporting pilferage,” he said.
Meralco spokesman Joe Zaldarriaga said the company will continue to bring down system loss to benefit its customers.
“We’re committed to look for ways and institute measures to further bring this down. At the end of the day, once we are able to address the system loss levels, it benefits the customers,” he said.
Meanwhile, 89 ECs were able to meet the cap set by ERC in 2015, latest data from the National Electrification Administration (NEA) showed.
NEA, the agency tasked for the rural electrification program, monitors 119 ECs nationwide. It said the ECs posted an average record low system loss of 11.12 percent in 2015, lower than the 11.67 percent system loss in 2014.