Republic Act 7832 (Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994) recognized that not all systems loss ought to be borne by the power distributors. It is for this reason that RA 7832 made it state policy to impose a cap or ceiling on how much systems losses can be recovered from consumers.
According to the National Tax Research Center, 12.29 percent of total electricity consumption from 2004 to 2010 went to power systems losses.
System loss refers to the difference between the amount of electricity purchased by the distribution utility and the amount of electricity paid for by the users. Much of these systems losses are due to theft of electricity and of materials and components of equipment and transmission lines.
For example, in its 2016 annual report, MERALCO posted system losses of 6.35 percent.
“The benefits of achieving a system loss significantly lower than the current regulatory cap of 8.5% have accrued to our consumers, who have effectively realized savings estimated at PhP26.9 billion or 9 centavos per kWh, over the period 2008-2016,” the annual report states.
The House Committee on Energy has received the draft of a consolidated bill seeking to phasedown the amount of systems loss electricity distribution utility firms and cooperatives may recover from their consumers.
Recoverable systems loss of the electricity distributors has been at 8.5 percent for private electric utilities and at 13 percent for electric cooperatives since 2010 as per ERC resolution.
The draft consolidated bill, presented by technical committee chairperson 1-CARE Party-list Rep. Carlos Roman Uybarreta, gradually phases down the recoverable systems loss of private distributors CEDC, DLPC, MERALCO, SEZC and VECO from 6.5 percent in 2019 to 5.5 percent in 2022.For AEC, BLCI, CELCOR, CEPALCO, CLPC, DECORP, IEC, ILPI, LUECO, MECO, OEDC, PECO, SFELAPCO, TEI, and all other (power distribution utilities) PDUs the distribution feeder loss cap slides from 7 percent in 2019 to 6 percent in 2022.
Uybarreta said the recoverable distribution system loss shall be computed based on the most recent 12 months.
“Distribution loss caps for PDUs shall be reviewed in 2021.”One cluster of electric cooperatives would see their recoverable systems loss shrink from 12 percent in 2018 to 8 percent in 2022.
These cluster of electric coops are BATELEC II, MORESCO I, PENELCO, SOCOTECO I, CENECO, LEYECO II, SOCOTECO II and ZAMCELCO:Another cluster of electric coops would see their recoverable systems loss pared down from 12 percent this year to 10.25 percent in 2022.
This cluster is made up of: ABRECO, AKELCO, ALECO, ANECO, ANTECO, ASELCO, AURELCO, BATELEC 1, BENECO, BILECO, BOHECO 1, BOHECO II, BUSECO, CAGELCO I, CAGELCO II, CAMELCO, CANORECO, CAPELCO, CASURECO I, CASURECO II, CASURECO III, CASURECO IV, CEBECO I, CEBECO II, CEBECO III, CENPELCO, COTELCO, DANECO, DASURECO, DORECO, ESAMELCO, FIBECO, FLECO, GUIMELCO, ILECO I, ILECO II, ILECO III, INEC, ISECO, ISELCO I, ISELCO II, LANECO, LASURECO, LEYECO I, LEYECO III, LEYECO IV, LEYECO V, LUELCO, MAGELCO, MOELCI I, MOELCI II, MORESCO II, NEECO I, NEECO II-Area 1, NEECO II-Area II, NOCECO, NONECO, NORECO I, NORECO II, NORSAMELCO, NUVELCO, PANELCO I, PANELCO III, PELCO I, PELCO II, PELCO III, PRESCO, QUEZELCO I, QUEZELCO II, QUIRELCO, SAJELCO, SAMELCO I, SAMELCO II, SOLECO, SORECO I, SORECO II, SUKELCO, SURNECO, SURSECO I, SURSECO II, TARELCO I, TARELCO II, ZAMECO I, ZAMECO II, ZAMSURECO I, ZAMSURECO.
There is one cluster of electric coops whose recoverable systems loss would be stable at 12 percent from 2018 to 2022.
This cluster is made up of the electric coops on some islands: BANELCO, BASELCO BATANELCO, BISELCO, CASELCO, CELCO, DIELCO, FICELCO, IFELCO, KAELCO, LUBELCO, MARELCO, MARIPIPI, MASELCO, MOPRECO, OMECO, ORMECO, PALECO, PROSIELCO, ROMELCO, SIARELCO, SIASELCO, SULECO, TAWELCO, TEILCO, TISELCO.The consolidated bill empowers the ERC to determine every (3) years, whether the caps shall be reduced further on the basis of load density, sales mix, cost of service, delivery voltage, and other technical considerations, as well as international benchmarks, taking into account the viability of PDU’s and ECs, the impact on distribution charge and the interest of the consumers.
“If further reduction is warranted and reclustering of ECs becomes necessary, the ERC shall set, promulgate and approve new rules thereof, without need of congressional action Provided, That the ERC shall establish a timeframe for the compliance of all the DUs with the system loss rate caps: Provided further, That such timeframe for compliance shall coincide with the next regulatory period of PDUs and ECs: Provided finally, That for ECs operating in Small Power Utilities Group (SPUG) areas, such timeframe shall concur with their rate filing,” the draft bill also provides.In the Lower House, three measures were filed pertaining to the systems loss – House Bill No. 942 (Rep. Tiangco); House Bill No. 2297 (Rep. Rodriguez); House Bill No. 6341 (Reps. Batocabe, Garbin, Jr. & Co)