The Energy Regulatory Commission (ERC) has thumbed down the request of utility giant Manila Electric Company (Meralco) to defer the implementation of the revised system loss caps, which are scheduled by January 2010.

This will then offer hope to consumers that they would be able to benefit from a slight reduction in their bills, as the costs accounting for system loss passed on to them would already be pared down in two months.

Taking into account the arguments propounded by Meralco in regard to the dwindling sales to industrial customers and the anticipated increase in pilferage cases, ERC chairperson Zenaida G. Cruz-Ducut noted that these cannot be taken as sufficient ground to put off the imposition of the new caps.

The impact of the global economic slowdown, Meralco inferred, has resulted in lower sales to industrial end-users. It also observed volume growth shift to residential end-users.

The ERC chair acknowledged through a reality in electricity systems that the sharing of electricity consumption between the industrial customers connected to high voltage and residential consumers connected to low voltage would have an effect on the total system loss.

Nevertheless, she emphasized that “both the existing and the proposed new caps were set regardless of whether or not the franchise area is highly urbanized.”

On Meralco’s concern relative to probable uptrend in pilferage cases, Ducut noted that recent issuances by the ERC “have given distribution utilities, like Meralco, more than sufficient means and incentives to deter or curb” such cases.

The current level of recoverable system loss cap is at 9.5-percent, and the previous ERC ruling slashed this to 8.5 percent for private distribution utilities. For the electric cooperatives, the system loss cap was reduced to 13 percent from the prevailing 14-percent.

The ERC explained that the system loss cap is the limit by which a DU would be able to recover from its customers “the cost of the energy that is delivered to its system by its power suppliers,” albeit expounding that such energy may not actually be metered as being sold to its customers as these may have already been lost at the course of the electricity’s transmission or may have been pilfered by unscrupulous elements.

“The lower system loss cap approved by the ERC for implementation starting next year directly translates to a lower system loss charge for end-users whose DUs are incurring system losses above the mandated cap,” the regulator stressed.