ERC caps system loss pass-on costs at 5% for private distributors

THE electricity systems loss that distribution utilities can pass on to consumers has been capped by the Energy Regulatory Commission (ERC) to as low as 5.5% for private distribution utilities, the commissioners said on Monday.

“[The] range is 8.25 to 12% [for] ECs (electric cooperatives),” said ERC Commissioner Josefina Patricia A. Magpale-Asirit told reporters on Monday on the sidelines of a press conference at the commission’s head office.

“[For] private [distribution utilities, the] range is 5.5 to 6.5[%],” she added.

The lower figure is the resulting cap after the gradual decrease of the systems loss cap within a four-year period, she said.

Systems loss is the difference between the electric energy delivered to the distribution system and the energy delivered to the end-users and other entities connected to the system. The Senate has separately approved on third and final reading a bill that seeks to reduce the cap to 5% from 8.5% of systems loss for private distribution utilities. The cap for electric cooperatives will be lowered to 10% from 13%.

Sen. Sherwin T. Gatchalian, who chairs the Senate energy committee, said that with the proposed rates, the bill would contribute to immediate consumer savings. He noted that a systems loss rate of 10% for an electric cooperative in Mindanao would translate to a rate reduction of P0.1636 per kilowatt-hour. The annual savings at P196.32 is equivalent to seven kilos of rice, he added.

ERC Chairman Agnes T. Devanadera said the commission will review its system loss cap should the Senate bill on system loss become law.