The Institute of Integrated Electrical Engineers of the Philippines (IIEE) has called for engineering-based reforms on system loss charges, saying the ongoing review of the Electric Power Industry Reform Act (EPIRA) presents an opportunity to strengthen the country’s power sector while protecting consumers.
In a position paper released Wednesday, the IIEE said policymakers should “adopt practical, evidence-based policies that protect consumers while supporting a safe, reliable, efficient and sustainable electric power industry.”
The organization emphasized that technical system losses are an inherent characteristic of electricity delivery and should not be treated the same as avoidable operational inefficiencies.
“Technical system losses are an inherent part of any electric power system and cannot be eliminated,” the IIEE said. “The engineering objective is to continuously reduce these losses through better system planning, upgrade and development, sound design, proper operation and effective maintenance.”
The group noted that while technical losses naturally occur as electricity passes through transmission and distribution networks, non-technical losses, including electricity theft, meter tampering and billing inaccuracies, “impose unnecessary financial burdens on utilities and ultimately on law-abiding consumers.”
According to the IIEE, reforms on system loss recovery should clearly distinguish between unavoidable engineering losses and avoidable operational inefficiencies, while balancing consumer protection, utility sustainability and long-term grid modernization.
Further, it said recoverable system losses should continue to be determined using engineering and economic principles.
“Recoverable system losses should continue to be determined using established engineering parameters, including network configuration, load density, delivery voltage, conductor characteristics, transformer loading, customer mix as well as socio-economic conditions,” the group stated.
The IIEE also urged regulators to strengthen accountability and adopt performance-based engineering regulation.
“Recovery mechanisms should continue to encourage utilities to improve technical performance while ensuring accountability through measurable engineering and operational performance indicators,” it said.
To improve efficiency and reliability, the group called for continued investments in “distribution automation, advanced metering infrastructure (AMI), smart grid technologies, voltage optimization and other engineering solutions.”
The organization likewise underscored the need for an equitable transition, particularly for financially constrained electric cooperatives and distribution utilities.
“IIEE recommends an equitable transition wherein any reform affecting system loss recovery should be accompanied by mechanisms that will enable financially constrained DUs to modernize their networks through appropriate financing, technical assistance, and performance-based investment programs,” the group said as it pledged to support policymakers in crafting reforms.
It added that the IIEE “stands ready to work with the Congress, DOE, ERC, NEA, and other stakeholders in developing engineering-based recommendations for the continuing modernization of the Philippine electric power industry.”
Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.
Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.
