System loss charges may soon be removed from electric bills

System loss charges may soon be removed from electric bills

The Department of Energy (DOE) is looking to remove system loss charges from consumers’ electric bills, an official said in a forum on Monday.

DOE, through its legal agency, will study the possibility of removing system loss charges from electricity bills following reports that some distribution utilities have system losses going over the cap set by the Energy Regulatory Commission (ERC), DOE spokesperson Pete Ilagan said.

“According to (DOE) Secretary Alfonso Cusi, why [the burden of system loss should be] passed on to consumers when it can be shouldered by utilities, which is a common practice in other countries,” Ilagan said.

System loss are unbilled power caused by pilferage and physical loss of energy during electricity distributions. Through Republic Act 7832, or the Anti – Electricity and Electric Transmission Lines/Materials Pilferage of 1994, these charges are passed on to the consumers.

A 9.5 percent system loss cap is set by the ERC for privately owned DUs while 13 percent is set for electric cooperatives (EC). This is passed on to consumers through a line item in their monthly electric bills.

“The results of the study will form part of the DOE’s position on how this can be recommended to Congress, which allowed the pass-on charges to consumers under the law,” he said.

Manila Electric Co. (Meralco) brought down its system loss and generated up to P20 billion for its customers, Meralco vice president Ferdinand Geluz said. The company’s system loss is currently at 6.46 percent.

“We’ve been very effective [in reducing system loss with the help of] the local government units (LGU) in terms of policing areas prone to pilferage. Another help is, of course, the consumers’ help in policing, reporting pilferage,” he said.

89 other ECs were able to meet the cap set by the ERC last year, data from the National Electrification Administration (NEA) said.