DUs find relief as ERC extends deadline for filing SL cap determination

The Energy Regulatory Commission (ERC) approved on November 16, 2005 the requests of distribution utilities (DUs) to extend the deadline for the filing of petitions on system loss cap from November 4, 2005 to April 30, 2006. The ERC took into consideration the difficulty being encountered by the DUs in the data gathering process.

“We have to be very sure that the data to be submitted by the DUs refer to those actually used, in place, and directly necessary in the delivery of power service to end-users,” ERC Chairman Rodolfo B. Albano, Jr. announced.

Under the Guidelines for the Application and Approval of Caps on the Recoverable Rate of Distribution System Losses issued by the ERC on September 29, 2004, all DUs are required to file a petition for distribution system loss caps. They were also mandated to segregate their technical, non-technical, and administrative system losses and propose a cap for each system loss. The ERC will establish separate caps for each of the segregated losses based on load density, sales mix, cost of service, delivery voltage and other technical considerations that it may deem appropriate. System losses in excess of the cap will be borne by the DU and thus, cannot be passed on to the consumers. Such caps may vary once a DU introduces technical changes on its system subject to the approval by the ERC.

Section 43 (f) of Republic Act No. 9136 and the Philippine Distribution Code provide that the system loss prescribed under Republic Act No. 7832 or the Anti- Pilferage of Electricity Act shall be replaced by caps to be determined by the ERC.

The current system loss caps under R.A. 7832 are pegged at 9.5% for privately-owned DUs and 14% for the electric cooperatives (ECs), or actual losses, whichever is lower.

December 22, 2005

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