ERC granted technical assistance on system loss study

The Regulatory Operations Service (ROS) of the Energy Regulatory Commission (ERC) recently launched a series of Training Workshops for Distribution Utilities on the Segregation of Distribution System Losses and Establishing Caps on Recoverable Rate of Distribution System Losses in the Philippines which is funded by the Asian Development Bank (ADB) and the World Bank (WB), through the Public-Private Infrastructure Advisory Facility (PPIAF).

The workshop which also served as fora for consultation were formally opened by Hon. Rodolfo B. Albano, Jr, Chairman of ERC, last February 17, 2004 at the Sulu Hotel in Quezon City. The Cebu leg of the workshops was opened by Commissioner Jesus N. Alcordo and Director Anthony Alden S. Aguilar of the ROS. The workshops were attended by representatives of Electric Cooperatives and Private Utilities from all over the country.

Prior to the conduct of this training workshop, a review of policies, regulations studies, data and methodologies related to the segregation of distribution system losses was done. Thereafter, models and methodologies for segregating the said losses were studied to arrive at the guidelines for the application and approval of recoverable rate of distribution system losses.

With the proposed methodology to segregate losses and establish caps on recoverable rate of system losses, the Distribution Utilities will be required to qualify and categorize system losses according to Technical, that are inherent in electric equipment, Non-Technical, which include pilferage, and Administrative, which are needed for the proper operation of the electric system.
This process will eventually provide the necessary information for the utilities to develop a system loss reduction program, which will benefit both the utilities and the customers. Electric utilities that participated in the workshops, particularly the electric cooperatives, have expressed their support to the proposed methodology being introduced by ERC.

“The Commission encourages the proactive participation of the distribution utilities. This is a big step towards realizing the reforms in the Philippine electric power industry as envisioned by R.A. 9136 or the Electric Power Industry Reform Act (EPIRA),” Chairman Albano said.

The EPIRA was enacted by Congress in 2001 to ensure the safe, reliable, secure and efficient electricity supply at affordable prices for Filipinos. The ERC is a beneficiary of the Public-Private Infrastructure Advisory Facility (PPIAF) of the Asian Development Bank and the World Bank.

“We are grateful to ADB and the World Bank for providing us the necessary assistance to undertake this very important project to establish the new caps for the segregated losses that can be recovered by the utilities from the customers. This will result in improved service, reduced operating costs and improved profitability. ERC will be able to sustain its efforts of balancing the interest of the electric power industry investors and that of the consumers,” Chairman Albano remarked.

The Commission earlier signed an Order dated January 12, 2004 calling for a series of public consultations on the proposed Guidelines for the Application and Approval of Caps on the Recoverable Rate of Distribution System Losses.

Participants to these consultations include private and local government unit (LGU) distribution utilities and electric cooperatives nationwide. The workshops were held in Cebu City, Quezon City, and Baguio City.

The DU representatives who participated in the public consultations were able to comment on the guidelines and had learning sessions on the methodology for segregating distribution system losses. They were also exposed to tools for quantifying and segregating technical losses. Developing distribution network models was also provided in the training workshop.

March 19, 2004