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ERC dismisses 8-year-old petition on system loss rules for power system

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Meralco linemen electric meter
Meralco workers check on an electric meter at a barangay in Quezon City. -- BW FILE PHOTO

THE Energy Regulatory Commission (ERC) has dismissed for being moot and academic a joint petition seeking incentives for companies that manage to bring systems losses below a set level, which was filed by power operators and distribution utilities.

In an order promulgated on March 14, the ERC said the petition for the regulator to initiate rule-making by approving proposed guidelines for computing system loss had already been addressed by the rules approved by the commission in 2017 and subsequently clarified through a resolution in 2018.

“Thus, the instant Joint Petition should be declared moot and academic considering that the Commission had already resolved the issues raised by the Joint Petitioners,” the ERC said.

The petitioners are the Private Electric Power Operators Association, Inc, the Philippine Rural Electric Cooperative Association, Inc., and Manila Electric Co. Their petition dates to Jan. 27, 2011.

The proposed guidelines contain the details of the incentive scheme, which calls for the system loss rate to be calculated and billed each calendar month using the prevailing system loss cap.

In case the actual annual system loss level of a distribution utility falls below the prevailing cap set by the ERC, an incentive scheme to further lower the system loss will be implemented for the benefit of consumers.




A system loss savings equivalent to the customer share in the incentives will be reflected as a separate line item in the electricity bill upon the implementation of the incentive scheme.

The rate for the savings is computed by taking the difference between the computed system loss charge at the cap and the computed system loss charge at the actual 12-month moving average system loss. The resulting difference is then multiplied by the customer share in the incentive scheme to arrive at the savings rate per kilowatt-hour.

The ERC said since the filing of the petition in 2011, it had adopted rules and resolutions that are directly related to and responsive to the petitioners’ proposal.

These include rules issued in 2017 for setting the distribution system loss cap and establishing performance incentive scheme for distribution efficiency.

In 2018, the ERC issued a resolution clarifying the system loss calculation and providing the effectivity of the rules for setting the distribution system loss cap.

In September 2016, the commission conducted a study on system loss for purposes of establishing the new caps based on the parameters prescribed under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA). The proposal of the petitioners were also considered in the study.

The ERC then came up with proposed rules on distribution system loss based on the EPIRA parameters and the proposals submitted by the petitioners. The proposed rules underwent public consultations and legislative hearings in which various stakeholders had participation in the discussion.

On Dec. 5, 2017, the ERC approved the rules, but ahead of their publication, some electric cooperatives requested clarification.

On April 23, 2018, the commission approved the system loss resolution, which also clarified the questions raised by the electric cooperatives relating to the previously approved rules. — Victor V. Saulon