Power distributors must follow system loss cap rules — ERC

The Energy Regulatory Commission had issued a resolution requiring distribution utilities to strictly follow the present guidelines and format in applying for a system loss cap.

The cap, or limit, refers to the maximum allowable rate that distributors can charge against their system loss. System losses in excess of the cap cannot be passed on to the consumers, meaning that it is the distributor that will bear it.

The ERC, citing Republic Act 9136 or the Philippine Distribution Code, said system loss should be classified also into technical loss, non-technical loss and administrative loss.

The ERC prescribed the caps for technical and non-technical losses that a particular distributor can pass on to its consumers. These caps, however, should be identified and reported separately to the ERC.

In the case of administrative losses however, the distributor shall submit an application for such to the ERC for approval, based on connected essential load.

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 might be appropriate.

Last December 8, the ERC held a public hearing with distribution utilities and other electricity providers, about the adoption of a format in the application for system loss cap among distributors.

The ERC said this format for systems loss cap will promote a policy of disclosure of transactions to protect public interest, which is affected by the rates and services of the power distributors and other power service providers. - Wenna A. Berondo