By Tracy Cabrera
DESPITE the expressed proposal for reforms mentioned by no less than President Ferdinand ‘Bongbong’ Marcos Jr. in his State of the Nation Address (SoNA) last Monday, energy industry stakeholders showed a lukewarm response, stressing the need for careful study before their adoption.
Still, government regulators announced they are keen on pushing the energy reforms sought by the President, which include the removal of systems loss charges that have been blamed for high power rates.
According to Department of Energy (DoE) secretary Sharon Garin, “(they) fully support the president’s clear policy direction and stands ready to translate these priorities into concrete programs, investments and legislative reforms that will provide lasting benefits for Filipino consumers, businesses and future generations.”
Earlier, Mr. Marcos Jr. had mulled the removal of ‘systems loss’ in electric bills to ease consumers’ woes even as he called for amendments to the Electric Power Industry Reform Act (Epira) that would remove consumer burdens like the systems loss charge and the attendant value-added tax.
He also called for the passage of the Sariling Kuryente Act, which seeks to make rooftop solar panel installations and battery storage systems more accessible and affordable for Filipino families.
Secretary Garin explained that systems loss refers to electricity lost during delivery due to technical issues or non-technical factors such as theft or electricity pilferage.
“Laws such as the EPIRA (Republic Act 9136 or the Electric Power Industry Reform Act of 2001) and the Anti-electricity and Electric Transmission Lines/Materials Pilferage Act of 1994 allow distribution firms to recover some of the loss from consumers via a charge included monthly power bills,” she noted.
Thr country’s largest distribution utility, Manila Electric Company (Meralco), reacted to the President’s call, saying it “respected” the policy move but added that systems losses were a “common operational aspect” that power firms have to deal with.
It disclosed that it would “actively participate in the discussions as the proposed amendments to the EPIRA are deliberate.”
“Any (of the) reforms should also support the ability of distribution utilities and electric cooperatives to efficiently operate, invest in infrastructure and system resilience and deliver safe and stable electricity service,” Meralco executive vice president and chief operating officer Ronnie Aperocho pointed out.
“We believe it is important to recognize that system loss is not unique to any distribution utility but is a common operational aspect of the delivery of electricity, which affects the entire power industry,” Aperocho added.
He asserted that “while distribution utilities like Meralco continue to invest in modernizing and upgrading facilities and deploying technologies that reduce system losses, a certain level of technical losses remains inherent in operating an electric distribution system.”
“We have consistently invested in system loss management initiatives, network modernization, and operational efficiencies, which enable us to maintain our system loss well below the 6.5 percent cap set by the Energy Regulatory Commission.”
On the other hand, Developers of Renewable Energy for AdvanceMent Incorporated president Jose Layug similarly called for careful consideration of the President’s proposal for reforms.
“We support the proposal of the President to reduce electricity rates, (but) an in-depth and calibrated study must be undertaken before considering eliminating systems loss in the electricity bills,” he advised.
“Systems loss has two components. First is the non-technical losses due to electricity theft and illegal tapping, jumper wires and the second one is technical losses as energy turns into heat as electricity flows through long wires and transformers,” he spelled out.
Philippine Energy Efficiency Alliance President Alexander Ablaza also gave his take: “We will need to distinguish between technical losses and non-technical losses. While energy is naturally lost in conveying and transforming electricity, removing it completely is a technical impossibility. It may be capped progressively though, and there is a pending house bill for this, which is HB 4599.”
“Maybe the President’s directive could crack the whip on the non-technical losses such as electricity theft, meter reading errors and similar issues caused by reasons outside the normal technical operations of transmission and distribution utilities,” Ablaza enthused.
In view of these reactions, Garin disclosed that the energy department is ready for discussions with industry stakeholders, which was reiterated by the Energy Regulatory Commission (ERC).
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