The Energy Regulatory Commission (ERC) has tapped in a third party consultant to review the system loss charges aimed to reduce burden to the consumers.
The ERC signed a contract with PowerSoly Inc. last month to study and make recommendations on system loss charges for the benefit of consumers, spokesperson Floresinda Digal told Sen. Sherwin Gatchalian in yesterday’s Senate hearing.
PowerSoly will review how the components of the system loss charge can be segregated into technical and non – technical items, including updating the system loss cap, Digal said.
“The first part of the terms of reference (TOR) will be a study on how system loss can be segregated to technical and non-technical, including what levels of technical and non-technical, if ever, will be recoverable. The second part is the establishment of a new cap we are presently at 8.5 percent and 13 percent. They will also study if it can still be lowered,” she added.
System losses are unbilled power caused by pilferage and physical loss of energy when electricity passes through distribution lines that can be passed on to consumers through Republic Act 7832 or the Anti – Electricity and Electric Transmission Lines/Materials Pilferage act of 1994.
The current system loss cap is at 8.5 percent for privately – owned distribution utilities and 13 percent for electric cooperatives (EC) which can also be passed on to consumers through a line item in monthly bills.
Manila Electric Co. (MERALCO)’s system loss is at 6.46 percent, way below the cap set by the ERC. While 89 ECs were able to meet the cap set by the ERC last year, data from the National Electrification Administration (NEA) said.