The last we heard of systems loss was during the Manila Electric Company (Meralco) board controversy when a multiple-arena attack was waged against the utility, curiously, from a state pension fund and a gaggle of politicians. In the midst of controversy, in a patch reserved for professional and learned regulators, a political appointment took place.

The Energy Regulatory Commission (ERC) chairman invoking retirement cut short his six-year term and an acting chairman was appointed. Among the choices were the co-chairman of the Joint Congressional Power Commission (JCPC), another, a principal of the law firm that represented Arroyo in her election suits. One, well-qualified. Another, well-connected.

Among the issues hurled against Meralco was the question of systems losses. Here the ERC is the adjudicator. Where the debate is technical, quantitative and complex, wars are waged beneath the radar of public scrutiny where political tentacles are effective. In this, it is appropriate analogy that slimy tentacles have suction cups, and in the case of the monstrous Architeuthis, serrated teeth and claws. Let us add that squid appendages can extend to the narrowest nooks, crannies and crevices.

The front-runners were tanked. Traditional qualifications were not enough. Connections, likewise. Other variables and credentials were ostensibly prioritized. Gloria Arroyo appointed a town mate, a second district solon succeeded by Arroyo’s son in Lubao, Pampanga, and a supporter of impeachment charges against former Chief Justice Hilario Davide. The appointee was the Palace deputy chief legal counsel. According to Arroyo’s son, the appointment was the result of party lobbying (PDI, July 11, 2008).

We never learn. In a regulatory landscape peppered by appointees entrusted technical responsibilities, recent energy crises are testimonies to the curse of appointment by patronage.

The resurrected question of systems loss is a case in point. Barely two months into the appointment the ERC mulled “the removal of the system loss charge” through “regional consultations”.

The subject of systems loss is not so complex as to merit reckless statements on total elimination. In global electricity pricing, such ensures economic viabilities and prevents more expensive system-wide outages.

Systems loss impacts on pricing from generation, to transmission, through distribution. Generation costs and losses pass unregulated and are ultimately borne by distributors. Caps are imposed at the transmission and distribution relays. In 2008, the allowable systems loss passed to consumers was 9.5% for DUs and 14% for cooperatives.

Systems loss caps vary among economies. Sans pilferage, systems loss on even the most efficient can range from 5% to 8%. Article I, Section 2 of the ERC Guidelines for the Application and Approval of Caps on the Recoverable Rate of Distribution System Losses identifies other factors as load density, SALES MIX, cost of service, delivery voltage and others.” The systems loss rate is that “determined…for DUs where different system loss charges were granted for each of their RESPECTIVE CUSTOMER CLASSES.” (caps supplied).

As essential cap determinants, these cannot be disregarded. Diverse markets require voltage controls, more transformers and cooling systems that increase systems losses. These extend beyond the simplistic segregation among technical, non-technical and administrative losses under Article 3.4 of the Philippine Distribution Code. In fact actual data validates market diversity’s importance in determining parameters.

Homogenous rural communities like Misamis Oriental, Bohol, Siargao, and Tablas Island registered from 6% to 6.9% systems loss. Storm-frequented Batanes, registered 9.30%. War-torn Lanao, 9.83%. Diversified economies with industrial and residential mixes such as Tarlac, Davao del Sur, Cebu and Metro Manila have actual losses ranging from 8.46% 9.83%. Meralco’s actual is 9.28%.

Efficient economies like the European Union average 7.0 %, while the United States has 7.5%. Canada had 9.2%. Bangladesh’s ranges from 20% to 35%, Pakistan, from 24.13% to 27.55%.

Curiously, under its resolution 17, the ERC now imposes on urban franchises the same limit as the actual loss of a homogenous rural economy like Camote Island, where, at 8.20% to 8.50%, there is absolutely no market diversity.

Apparently, violating its protocols, the ERC knowingly disregards market diversity despite having distribution databases ERC-DSL-02 and ERC-DSL-04 which specify customer mix and consumption data.

Recently the ERC wrote, “It is true that the sharing of electricity consumption between the industrial consumers that are connected to high voltage and residential consumers that are connected to low voltage has an effect on the total system loss,”. unfortunately, the ERC blindly imposed systems loss caps “regardless of whether the franchise area is highly urbanized (or not).”

We never learn. As in recent oil sector shortages, extraneous variables are ostensibly being prioritized.

Fatal error: Call to undefined function p75HasVideo() in /homepages/39/d169067170/htdocs/voices/wp-content/themes/NewFV/single-default.php on line 57