We have the power to minimize power cost

By Herbert Vego

 

IF we electricity consumers in Iloilo City do not police ourselves against power pilferage, we would never stop complaining against “overbilling”.

It’s because we pay for part of the “system’s loss” — the energy that the pilferers consume without paying a single centavo.

If it’s any consolation, the Energy Regulatory Commission (ERC) allows only a cap of 6.5 percent chargeable to systems loss.

Iloilo City’s distribution utility — MORE Electric and Power Corp. (MORE Power) – is therefore obliged to shoulder losses in excess of 6.5%. This could result in financial losses that the company could not absorb forever.

“Right now,” MORE Power President Roel Castro told us, “our system’s loss is equivalent to 14%.”

It does not take a mathematician to realize that since only 6.5% of systems loss is charged to legitimate customers, MORE Power pays the bigger excess to the power suppliers – thus diminishing, if not exhausting, its profit.

The truth of the matter is that when MORE Power took over the distribution franchise from Panay Electric Co. (PECO) nine months ago, its personnel discovered that apart from 65,000 paying customers, an added 30,000 non-paying ones had accumulated. They had been stealing electricity that bypasses electric meters with the use of gadgets known as “jumpers”.

Fortunately, some 10,500 of them have already “reformed” themselves into paying customers. The rest are also given the opportunity to apply with a bill deposit of P2,500 only. Otherwise, they face the risk of being charged in court for violation of the anti-power pilferage law (Republic Act No. 7832), punishable by six years imprisonment or more, or made to pay a fine ranging from P10,000 to P20,000.

We found out for ourselves how extensive power pilferage had been during a visit to MORE’s office. There we saw thousands of meters of wires confiscated from illegal connections.

Knowing that, the legally energized neighbors would not want to co-exist with power pilferers who would pass on to them the burden of subsidizing the system’s loss.

How could the previous distribution utility have survived without cracking down on power thieves? Was it by overbilling moneyed industrial and residential losers?

The misconception that persists directly links the distribution utility to the total charges. But the truth of the matter is that MORE gets only 10% of its collection. Yes, it doubles as collection agent for generation (67%) and transmission (2%) charges and value-added taxes (10%), among others.

MORE Power may buy more power than it needs and re-sell the excess to other distribution utilities.

On a per-kilowatt-hour basis, the residential end-user pays P10.34. That includes generation, transmission and distribution charges, etc. It used to be P11-plus during the last days of PECO.

MORE retains only P1.30 per kilowatt-hour, as regulated by the Energy Regulatory Commission (ERC).

Keeping charges as low as possible is the utility’s reliance on the Wholesale Electricity Spot Market (WESM), akin to the stock market where buyers go for the lowest prices available at a given moment. As far as MORE Power is concerned, it patronizes four generation suppliers, namely the Panay Energy Development Corporation, Panay Power Corp. (PPC), Aboitiz Renewable and KEPCO-Philippines.

The National Grid Corporation of the Philippines (NGCP) plays the crucial role of transmitting power from the generators to the distribution utilities which, in turn, deliver it to end-users.

For a rapidly expanding metropolis with 180 barangays, the existing six substations (including the new mobile one) would not suffice in the next five years. MORE intends to acquire two or three more.

 

“We are raising our capital expenditure from P1.3 to P1.9 billion,” Castro said, “in order to modernize within three to five years.”

 

Modernization entails gradual replacement of PECO’s old poles, wires, cables, transformers, buildings, infrastructure, and obsolete equipment.

Despite the pandemic that drastically brought down power consumption in March and April this year, the trend has reverted to rising power usage, rising to the challenge of Mayor Jerry Treñas, “Level up, Iloilo!”