AFTER incurring heavy losses in 2013, Olongapo Electricity Distribution Co. Inc. (OEDC) reported that it successfully reduced its systems losses since being taken over by new management.
Management of OEDC was taken over by power distributor Cagayan Electric Power and Light Co. (Cepalco) in June 2013.
In its yearend report, OEDC said that from 37 percent in June 2013, its systems losses had narrowed to about 13 percent last year.
However, this was still higher than the 8.5-percent cap set by the Energy Regulatory Commission (ERC) for private distribution utilities.
OEDC said it inherited the 37 percent systems losses from the Olongapo City Public Utilities Department (OCPUD) last June 2013.
Cepalco later won the right to operate Olongapo Electricity with its bid of $13.3 million (P610.5 million). It officially took over operations in June 2013.
With a very high systems loss, OCPUD was unable to sufficiently collect from its customers the needed revenue to pay both generation and transmission costs.
“This also meant that whatever revenue generated from distribution charges went to the payment of generation and or transmission costs,” said OEDC.
This also resulted in operations being unable to fund capital expenditures needed to maintain and improve the system.
Due to the inability of OCPUD to correct the systems losses, it later on accumulated unpaid obligations to power suppliers.
However, over a period of 18 months, OEDC said its systems losses have been going down.
“OEDC has been able to lower the losses to the ERC-mandated cap of 8.5 percent by December 2014,” the company said.
The performance at year-end was further retained in 2015 with the January systems losses at 8.44 percent and February at 8.5 percent.
The company said the challenge now is how to maintain the systems losses at the 8.5 percent or lower level.
Losses below the ERC cap benefits customers through lower pass-on charges.
Together with the replacement of poles and wires, OEDC has already replaced the old 5MVA 69kV-4.16kV CBMU power transformer to a newer 15MVA 69kV-13.8kV.
This replacement also provides extra reliability to the network as the added capacity allows for switching of loads among the substations to allow for proper maintenance.
The new capacity will also ensure that the network will be able to meet the power requirement of the City of Olongapo.
“In fact, the entry of SM and its future expansion would not have been possible were if not for the system improvements and capacity expansion done by OEDC,” the firm said.
While there has been significant progress in the network, there is still much to be done before 100 percent rehabilitation is completed.