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By Euan Paulo C. Añonuevo, Reporter
Giant utility Manila Electric Co.
(Meralco) is targeting to reduce its system-loss charges below the
cap set by the Energy Regulatory Commission this year. Its plan
would redound to a reduction in consumers’ electricity bills.
During a forum organized on
Friday by the Philippine Chamber of Commerce and Industry, Jesus
Fransisco, Meralco president and chief operating officer, said the
company is looking at a system loss of 9 percent in 2008, which
would result in P953 million in savings for consumers. The amount is
roughly equivalent to a reduction of P0.03 per kilowatt-hour in
electricity bills.
System loss is the difference
between the electricity purchased by electric utilities from power
suppliers and the electrical energy they sold to their customers.
The “lost” electricity may arise from technical losses and
pilferage.
The government currently allows
private distribution utilities, such as Meralco, a 9.5-percent cap
on system loss and electric cooperatives supervised by state-run
National Electrification Administration, 14 percent of which can be
collected from consumers. Any excess from such caps will have to be
shouldered by the utilities.
For the first five months of
2008, Meralco’s system loss was averaging above the cap set by the
regulatory commission. This performance, however, is usually the
case during the first half of the year, Francisco said.
“There are still six months
left [in the year], it is still too early to tell but we’re
hitting our goals,” he added.
If it succeeds, it will be the
first time for Meralco to breach the system-loss cap set by the
regulatory commission. A decade ago, the country’s largest
distribution utility had to shoulder P2 billion in cap excesses but
has since brought this down to P200 million last year.
DTI petition threatens Meralco
On the sidelines of the forum,
Ivanna de la Peña, Meralco vice president for utility economics,
said an omnibus petition filed by the Department of Trade and
Industry with the regulatory commission seeking to scrap system-loss
charges would have a negative impact on the company’s finances.
De la Peña said if the petition
is granted, Meralco and other utilities may go bankrupt.
For every percent above the cap
set by the commission, Meralco is estimated to shoulder P1.2 billion
in costs.
Aside from the removal of
system-loss charges, the Trade department also asked the regulatory
commission to order Meralco to be prudent in its purchase of
electricity by buying from the Wholesale Electricity Spot Market
during off-peak hours when prices are cheaper and to charge
distribution rate at least equal to or lower than the distribution
charges of other utilities.
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