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MANILA Electric Co. (Meralco) said it will not stand in the way of
the Energy Regulatory Commission’s (ERC) quest to lower system
loss caps of electric utilities.
“We will wholeheartedly cooperate with the
commission in these efforts to lower electricity rate,” Jesus
Fransisco, Meralco president, said.
ERC officials said on Wednesday that the
regulator is keen on lowering system loss caps as a means to cut the
country’s electricity rates, considered the second highest in Asia
next to Japan.
Under the Electric Power Industry Reform Act of
2001 (Epira), private distribution utilities like Meralco and
state-administered electric cooperatives are prescribed a
9.5-percent and 14-percent system loss cap, respectively.
The law also stipulates that the ERC has the
power to amend these caps taking into consideration factors such as
load density, sales mix, cost of service, delivery voltage and other
technical considerations.
Three types of system losses—technical,
non-technical and utilities’ electricity consumption—may be
recovered from consumers, according to law. But any losses in excess
of the caps are absorbed by the utilities.
This means that the lower the caps, the more
losses that utilities would have to shoulder, forcing them to
improve the efficiency of their operations.
Francis Saturnino Juan, ERC executive director,
said the regulator is targeting to come up with guidelines on the
lowering of system loss caps as well as the removal of utilities’
electricity expenses from such charges.
Fransisco said that Meralco will participate in
upcoming public consultations with regard to the ERC’s proposal to
lower system loss charges.
Last year, Meralco’s system loss stood at 9.65
percent, of which 0.27 percent was from the company’s own
electricity consumption. The said figures comprise an average of
P0.63 per kilowatt-hours and P0.02 per kilowatt-hours, respectively,
of Meralco customers’ electricity bills.
-- Euan Paulo C. Añonuevo
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