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By Euan Paulo C. Añonuevo, Reporter
Double-digit system losses incurred by electric
cooperatives, which distribute electricity to rural areas, in part
account for the country’s high electricity rates, an official from
state-run National Electrification Administration (NEA), said
Monday.
“Reasons for higher electricity rates vary in
every electric distribution utility. As for the ECs [electric
cooperatives], the system losses and operating expenses are two
controllable costs affecting distribution rates,” said Edita Bueno,
the agency’s administrator.
System loss is the difference between the
electricity purchased by distributors from power suppliers and the
electricity they sell that is allowed by regulators to be passed on
to consumers.
The government allows private distribution
utilities, such as the Manila Electric Co. (Meralco), a 9.5-percent
system loss and electric cooperatives, 14 percent. Both system
losses can be collected from consumers but any excess will have to
be shouldered by the utilities.
Bueno said some of these utilities have
minimized such losses.
She added that five electric cooperatives belong
to the “elite club” posting a 6-percent system loss: Cebu III
Electric Cooperative Inc. and Misamis Oriental I Electric
Cooperative Inc. with 6.50 percent; Davao Oriental Electric
Cooperative Inc. with 6.81 percent; Bohol Electric Cooperative I
with 6.82 percent; and Siargao Island Electric Cooperative Inc. with
6.87 percent.
Bueno said the electrification administration
has made available to the electric cooperatives a credit facility
with low interest rates for system-loss reduction. The agency will
also extend technical, institutional and management assistance for
such reduction.
The credit facility is expected to rescue
electric cooperatives suffering from financial and technical woes
that have kept a number of them from effectively participating in a
deregulated power industry.
At present, there is a total of 119 electric
cooperatives across the country that are being supervised by the
National Electrification Administration. The agency is aiming to
reduce their average system losses by 13 percent in 2008, 11 percent
in 2009 and 9 percent in 2010.
If the target is achieved, Bueno said, customers
will gain much from the savings that can be realized by their power
providers through the system-loss reduction.
“We will see to it that these [system] losses
are translated into savings for and by the ECs so that the consumers
can benefit from it through their [providers] upgraded distribution
lines, quality service and even lower electricity rates,” she
added.
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