RURAL UTILITIES remain compliant with the government’s limit on passing on system loss costs in the distribution of electricity to consumers with only five charging more than the prescribed cap in 2019, according to their association.
Lawmakers on Monday raised concerns on power providers which levied on customers the cost of system loss that exceeds the prescribed limit set by the Energy Regulatory Commission (ERC).
The Philippine Rural Electric Cooperatives Association (Philreca) affirmed that there were five out of all 121 electric cooperatives that charged as much as 20% for system loss in customers’ bills, way higher than the 12% limit.
“Five ECs (electric cooperatives), or 4.13%, were reported to have exceeded 20% system loss due to problems such as pilferages, overloaded system, long distribution lines (which increase voltage drop), and delayed implementation of capital expenditures project due to regulatory requirements, peace and order situation, and other concerns,” it said.
This was found in the 2019 compliance report on the performance of electric cooperatives by the National Electrification Administration (NEA).
The agency is already closely monitoring said “underperforming” utilities, and are subject to a series of discussions by all concerned stakeholders, the association said.
On average, electric cooperatives were able to charge system loss cost at a 10.16% level, “a figure well within the ERC cap.”
“Of the 117 ECs assessed, 99 are within the system loss cap, 59 of which have single-digit level. Only eighteen ECs or 15% exceeded the allowable system loss cap,” it added.
Power utilities are allowed by law to recover system loss from consumers at an approved rate.
A portion of electricity that dissipates in the process of distribution due to heat, pilferage and other causes is called a system loss. The cost of incurring such loss is recovered from consumers at a rate approved by the regulator.
In 2018, the ERC ordered the gradual reduction of said charges. By 2021, private electricity distributors will charge up to 5.5% for system loss recovery from a 6.5% cap, while electric cooperatives will recover the cost at an 8% limit in 2022 from 12%.
The commission has based its prescribed caps on load density, sales mix, cost of service, delivery voltage and other technical considerations.
“Overall, however, electric cooperatives have been complying [with] regulation and standards set by government regulators on system loss as well as other technical parameters,” Philreca asserted.
The House Committee on Good Government and Public Accountability continues to probe cases of the alleged spike in electricity bills and power interruptions during the lockdown period. — Adam J. Ang
