To further know about one’s electric bill, DUs (distribution utilities) define ‘system loss’, its two types, and its three percent inclusion in the electricity bill of an average household with 200-kWh power consumption per month.
Diving in headfirst to its two types will fully determine what and why system losses happen: Technical loss – separated into transmission and distribution losses — are brought upon by consequential distribution from a power generator to an electric cooperative (EC) or Distribution Utility (DU).
In a transmission system loss, the Standard writes, energy is sourced and ready for distribution by a power generator. “Electricity is transported or transmitted through high power lines from a power generation company 100 kilometers away to a private DU or EC,” it said.
“A 1,000-MW output from a generator may become only 980-MW once it finally reaches the DU or EC,” it added, stressing that system loss is inevitable in the delivery of electric service.
On the other hand, distribution system loss happens when electricity arrives at the DU (such as MERALCO, PALECO, BATELEC, etc.) to be converted and transferred to houses, factories, and offices, in which energy loss is incurred as heat and noise when delivered at the moment it is needed.
“As the distribution system stands ready to deliver power at the moment needed, the distribution system incurs losses even when no electric energy is actually being drawn by a customer,” it said.
The second type of system loss: Non -technical losses are usually caused by electric theft or pilferage and are not entirely within the DUs’ control.
While there are laws that threaten the act of pilferage, like the Republic Act No. 7832 (Anti-Electricity Pilferage Act of 1994), these actions have not stopped no matter what action – both the government and utilities – are taking.
These system losses, however, can be limited only to a certain technical and economic extent. Solutions like bigger wires bringing power to the household surface, but these require a huge capital. Thus, DUs would have to seek the approval from the Energy Regulatory Commission first.
Taking control over system loss
Several attempts that cap the distribution loss has been made. The latest was in 2008, where ERC set an 8.5 percent system loss cap for DUs and 13 percent for ECs.
New attempts through legislation in the congress have been made to further bring down the cap – including a bill that eyes a zero percent cap for DUs and five percent for ECs.
But bringing down the system loss would mean a huge investment from both DUs and ECs for projects that will lower the cap.
For instance, in bringing down the system loss to 5 percent, the Angeles Electric Corp told the Senate that they would need to spend P892 million for the reduction. Meralco would have to spend P65.53 billion, while Cagayan Electric Power and Light Company will spend P1.84 billion, based on documents submitted to the Senate.
These costs may lead to power rate increases to the power consumers and additional government resources that will answer anti-electricity pilferage operations that will clear illegal power lines.
“DUs will have to prepare a special CapEx plan specifically targeting how to [bring down losses]. And then they will go to the ERC for the approval of this CapEx plan and [it] will take a little bit of time for ERC to approve them all. And then after that, maybe all of them may be implemented in one year. But the impact cannot be immediately felt,” Prof. Rowaldo Dep Mundo of the University of the Philippines College of Engineering said.
Data from the DOE said that transmission and distribution losses in the country showed a huge decline over the years. System loss recorded in 2004 was as high 12.9 percent. In 2016, the loss went down to 9.1 percent.