Further Comments on New System Loss Caps for DUs Sought
The Energy Regulatory Commission (ERC), on November 11, 2008, published on its website (www.erc.gov.ph) the 2nd Draft Resolution Adopting A New System Loss (SL) Cap for Distribution Utilities (DUs) for comments by interested parties. Comments (in both hard and soft copies) using the prescribed format must be submitted on or before November 27, 2008 (Thursday). Electronic copies should be sent to tariffs@erc.gov.ph.
Public consultations have been conducted for Visayas and Mindanao on: (i) August 26, 2008 in Cebu City and for Luzon DUs on: (ii) September 3, 2008 in Pasig City. Comments and suggestions pertaining to the proposed recoverable SL rates as well as their effectivity dates were considered in the 2nd Draft Resolution.
This 2nd Draft Resolution provides that the maximum rate of SL that a DU can pass on to its customers to be: (a) eight and a half percent (8.5%) for private utilities (from eight percent [8%] in the first draft) and (b) thirteen percent (13%) for the electric cooperatives (from eleven percent [11%] in the first draft) of the total kilowatt-hours (kwh) purchased and generated. The recoverable rate will be the actual SL but not to exceed the said maximum rate of system loss.
“To minimize the impact of the proposed SL caps to the DUs, the ERC may initially set the improvement (decrease) to one percent (-1%)”, ERC Chairperson and CEO Zenaida G. Cruz-Ducut said.
The said 2nd Draft Resolution, also provides
that the actual company use not to exceed one (1) percent of total kilowatt-hours
(kwh) purchased and generated.
Such will be treated as operating and maintenance (O&M) expense. The new
caps will be effective starting January 2010 billing.
Section 10 of Republic Act No. 7832, better known as the “Anti-pilferage of Electricity and Theft of Electric Transmission Lines/Materials Act of 1994” set the maximum allowable rate of SL of the DUs. However, Section 43(f) of the Electric Power Industry Reform Act of 2001 (EPIRA) amended the said section of RA 7832 and authorized the ERC to determine the new cap on the recoverable rate of SL.
“As I have promised, I want the
electricity consumers to know that they have a strong ERC looking after their
welfare. The lowering of the system loss caps is just one of ERC’s moves
in reduction of electricity rates”, ERC Chairperson Ducut concluded.
November 20 , 2008