Systems loss/EVAT: reducing our electric bill by 19% in an instant

May 7, 2008 at 11:15 pm 6 comments

We read in the papers complaints that Meralco and all the other distribution utilities charge their customers for the system losses — loss of electricity due to pilferage and technical and administrative inefficiencies.

The culprit is actually a law enacted by Congress in late 1994, RA 7832, which allows:

1. private utilities like Meralco to charge up to 9.5% of power losses to custormers
2. electric cooperatives like Albay Electric to charge up to 14% of power losses to customers.

Beyond those caps, the utilities absorb the losses.

Thus, in my bill I have to pay P99 for systems loss. That is about 9% of my total bill.
Add the average 10% EVAT to the 9% of systems loss and that comes up to 19’% of my bill.
.
Repeal both laws and we consumers can easily reduce our electric bill by 19%.

Now why doesn’t the Arroyo government remove both the systems loss charge and the EVAT on power? Your guess is as good as mine.

Mon
———

REPUBLIC ACT No. 7832 December 8, 1994
ANTI-ELECTRICITY AND ELECTRIC TRANSMISSION LINES/MATERIALS PILFERAGE ACT OF 1994


REPUBLIC ACT No. 7832

AN ACT PENALIZING THE PILFERAGE OF ELECTRICITY AND THEFT OF ELECTRIC POWER TRANSMISSION LINES/MATERIALS, RATIONALIZING SYSTEM LOSSES BY PHASING OUT PILFERAGE LOSSES AS A COMPONENT THEREOF, AND FOR OTHER PURPOSES

Section 10. Rationalization of System Losses by Phasing out Pilferage Losses as a Component Thereof . – There is hereby established a cap on the recoverable rate of system losses as follows:

(a) For private electric utilities:

(i) Fourteen and a half percent (14 1/2%) at the end of the first year following the effectivity of this Act;

(ii) Thirteen and one-fourth percent (13 1/4%) at the end of the second year following the effectivity of this Act;

(iii) Eleven and three-fourths (11 3/4%) at the end of the third year following the effectivity of this Act; and

(iv) Nine and a half-percent (9 1/2%) at the end of the fourth year following the effectivity of this Act.

Provided, That the ERB is hereby authorized to determine at the end of the fourth year following the effectivity of this Act, and as often as necessary taking into account the viability of private electric utilities and the interest of the consumers, whether the caps herein or theretofore established shall be reduced further which shall, in no case, be lower than nine percent (9%) and accordingly fix the date of the effectivity of the new caps: Provided, further, That in the calculation of the system loss, power sold by the NPC or any other entity that supplies power directly to a consumer and not through the distribution system of the private electric utility shall not be counted even if the billing for the said power used is through the private electric utility.

The term “power sold by NPC or any other entity that supplies power directly to a consumer” as used in the preceding paragraph shall for purposes of this section be deemed to be a sale directly to the consumer if: (1) the point of metering by the NPC or any other utility is less than one thousand (1,000) meters from the consumer, or (2) the consumer’s electric consumption is three percent (3%) or more of the total load consumption of all the customers of the utility, or (3) there is no other consumer connected to the distribution line of the utility which connects to the NPC or any other utility point of metering to the consumer meter.

(b) For rural electric cooperatives:

(i) Twenty-two percent (22%) at the end of the first year following the effectivity of this Act;

(ii) Twenty percent (20%) at the end of the second year following the effectivity of this Act;

(iii) Eighteen percent (18%) at the end of the third year following the effectivity of this Act;

(iv) Sixteen percent (16%) at the end at the fourth year following the effectivity of this Act; and

(v) Fourteen percent (14%) at the end of the fifth year following the effectivity of this Act.

Provided, That the ERB is hereby authorized to determine at the end of the fifth year following the effectivity of this Act, and as often as is necessary, taking into account the viability of rural electric cooperatives and the interest of the consumers, whether the caps herein or theretofore established shall be reduced further which shall, in no case, be lower than nine percent (9%) and accordingly fix the date of the effectivity of the new caps.

Provided, finally, That in any case nothing in this Act shall impair the authority of the ERB to reduce or phase out technical or design losses as a component of system losses.

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6 Comments Add your own

  • 1. ami  |  May 16, 2008 at 7:59 am

    would you happen to know if power distributors in other countries also charge for systems losses? and if they do, how much?

    Reply
  • 2. kapirasongtinik  |  May 19, 2008 at 7:48 am

    http://www.philstar.com/index.php?Bansa&p=50&type=2&sec=54&aid=2008051864

    Bansa
    Meralco sinusulot ng 3 GMA crony

    Monday, May 19, 2008

    Tatlong “crony” umano ni Presidente Gloria Arroyo ang nag-aagawan sa pag-take-over sa Meralco.

    Ayon kay Bayan Muna Partylist Rep. Teddy Casino ang tatlong ito ang itinu­ turong “utak” sa demolisyon sa Meralco para magka­roon ng dahilan ng government take-over sa pinaka­malaking distribution utility sa bansa at hatiin ito sa tatlong franchise area.

    Ang plano ng tatlong malalaking pamilya ay ibinulgar matapos parata­ngan ni Casino na ang “Cebu Mafia” ang nasa likod ng mga serye ng atake sa pamilya Lopez at sa Meralco. Ginagamit umano ng mga pamilya na ito si Government Service Insurance System (GSIS) president and general manager Winston Garcia upang pataasin ang stake nito sa Meralco at atakihin ang mga polisiya ng nasabing distribution utility.

    “Clearly, Winston Garcia has a track record of using his position in GSIS to serve the interests of the Aboitiz group,” ayon naman kay Alliance of Concerned Teachers (ACT) president Antonio Tinio.

    Tinukoy din ni Tinio na ang pamilya Aboitiz ay nasa power generation at distribution din, banking, shipping at kilalang supporter at malapit sa Arroyo administration.

    Bukod sa pamilyang ito ay pinapaboran din ng Malakanyang ang Alsons Group na kon­tro­lado na­man ng pamil­yang Alcan­tara. Si Tomas Alcan­tara ay kilalang ba­hagi ng kit­chen Cabinet ni Pangu­long Arroyo at siya uma­nong tu­matayong lider ng bulong brigade ng Napocor mafia.

    Ayon sa mga sources sa industriya ng kuryente at opisyales ng Napocor, ang dalawang grupong ito ang nag-eengganyo sa Mala­ kan­yang na awayin ang kasalukuyang management ng Meralco sa pa­mamagitan ng pagkakalat ng intriga na ang mga Lopez ang sanhi ng mataas na presyo ng kuryente at hindi ang 12 porsyentong EVAT at ang mataas na singil ng Napocor.

    Idinagdag pa nila na ang mga Aboitiz at Alcan­tara ay naglalaway din sa mga power generating plants na pag-aari ng mga independent power producers (IPP) at gagamitin ang impluwensya nila kay Arroyo upang sungkitin ang mga ito. Bukod sa pagiging kamag-anak ni First Gentleman Mike Arroyo, isa sa mga lalaking Aboitiz ay matalik na kaibi­gan ni Pangulong Arroyo.

    Sinasabi rin ng mga sources sa Philippine Stock Exchange (PSE) na ang nangangasiwa sa pamimili ng Meralco shares ay Vivian Yuchengco, isang stock broker at opisyal ng PSE, at ang ATR Kim Eng ang siya namang dinadaanan ng mga transaksyon.

    Upang mapabilis ang paghawan ng Meralco shares, si Diosdado “Bu­boy” Macapagal at si En­rique Razon ng ICTSI, ang ingatyaman ng partido ni Arroyo, ang siyang gina­gawa ngayong bukal ng pera para mamili ng Meralco shares.

    Kinondena na ng mga kongresista ang ginaga­wang maniobra ni Garcia at ang sobrang pakikialam nito sa usapin ng Meralco ga­yong hindi niya maipali­wanag kung saan nauuwi ang salapi ng GSIS at kung bakit sangkaterbang rek­lamo na ang ginawa ng mga pensyonado at ng mga kawani na pamahalaan na bumubuhay sa institusyong ito.

    Lumilitaw din na bukod pa sa pagiging presidente at General Manager ng GSIS, si Garcia ay umuupo at sumasahod din ng milyun-milyong piso sa ibat-ibang kumpanya na may investment ang GSIS.

    Reply
  • 3. LUCITO B. HALCON  |  June 2, 2008 at 7:12 am

    bakit nga ba hindi palawakin ng gubyernong Arroyo an diskusyon kaugnay ng system loss. lahat naman nagi-implement niyan huh, mag-private electric utility o electric coop. bakit pokus MERALCO? lantaran na nga pangangamkam yan. di pa ba magkasya si Aboitiz sa kinita nya nung panahon ni FVR? mga gahaman talaga!

    Reply
  • 4. robbietan  |  August 9, 2008 at 7:51 am

    Other countries, like Canada and the USA, also charge their customers for systems loss. It is an inherent characteristic of electrical power systems.
    A generator needs to generate 101 watts so that you can use 100 watts in your house. the one watt difference is the system loss you pay the generator, since the generator made 101 watts.

    Reply
  • 5. Philip Jarina  |  March 6, 2009 at 2:07 am

    Philippines has the World’s Second Largest Geothermal Capacity. It is close to the equator that it has more solar energy hours than Canada and other European countries specially on winter. Located close to the Pacific Ocean, it can harvest abundant wind energy.
    Philippines can supply Asia’s cheapest electricity. Why is it’s electricity not Asia’s cheapest?
    There must be something wrong with the Electric Power Industry.

    Philip Jarina
    philipjarina.blogspot.com
    Free Continuing Education for Electrical Engineers

    Reply
    • 6. robbietan  |  June 24, 2009 at 11:54 pm

      green energy is more expensive than conventional sources. coal, natural gas and even nuclear energy produces cheaper electricity than geothermal, wind, hydro and solar. with the country being 33% green (a fact that I am very proud of !!! ) having higher power costs comes with the territory. even the usa can only dream of being 20% green in 2012.

      Reply

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