ERC sets public consultation on utilities’ system loss reduction

By Myrna M. Velasco – June 2, 2017, 10:01 PM

from Manila Bulletin

To further reduce the level of system loss being integrated in the charges to consumers, the Energy Regulatory Commission (ERC) has been expediting its consultation process on such regulatory framework.

The ERC announced that it slated public consultations (pubcons) across grids – in north and south Luzon areas to Visayas and Mindanao – from May 29 to June 1 this year.

“The public consultations on the proposed system loss cap will initiate the process leading to the approval of the final rules,” the ERC said.

ERC Officer-in-Charge Alfredo J. Non noted that taking the consumers’ pulse on such edict will hopefully enable them to set a framework “responsive to the needs of the public.”

He said this is in line with the government’s thrust “to unburden the general public from shouldering the costs of system losses in the distribution of electricity.”

There had been proposals to further reduce the cap on system losses that must be accounted for in the pass-through cost in the consumers’ electric bills.

ERC qualified that its proposed rules “intend to justify distribution system loss caps for all DUs (distribution utilities) based on technical criteria and objectives of the EPIRA (Electric Power Industry Reform Act) as it establishes separate loss caps for technical and non-technical losses.” The regulatory body indicated that the new rules will likewise “introduce incentives and/or penalties based on total distribution system loss cap to promote efficient operation and service of the DUs.”

Beyond lowering system loss caps, there are also proposals to remove the corresponding value added (VAT) charges levied to it, so it can help pare overall rates to consumers.

Once approved, this will be enforced as a component of performance standard set for distribution utilities, including electric cooperatives.