Systems Loss

Written on Friday, May 23rd, 2008 at 6:47 am | by Schumey

We’ve been hearing this phrase “systems loss” for several weeks now. It’s suppose to mean loss through pilferage or in simpler terms, stolen. Meralco has been under fire from all sectors because it passes on their “systems losses” to their consumers. Because of their ineptitude, we are the ones who end up paying. We are being forced to pay for their failure and and supposed mismanagement. While Gloria’s pack headed by GSIS president Winston Garcia is clawing at the heels of the Lopezes, it’s high time we make Gloria’s administration accountable for their own “systems loss” the we the people are paying for.

Corruption has been institutionalized under Gloria’s watch. We are now the 8th most corrupt country in the world. Because this administration has been mismanaging the country, we are the ones paying the price. Loans and aids continue to be misused. Bribery and kickbacks rampant and GMA and her gang continue to make fools of us. With almost all institutions under her control, we are helpless against their onslaught. Just like Meralco, they have turned our country into a monopoly wherein we have no other choice but to take what they dish out.

Systems loss is when we are heavily taxed not because the government is trying to increase social services but because we need to pay our ballooning debt. Systems loss is when small importers pay more because smugglers pay less. Systems loss is when Gloria needs to bribe the lower house and she distributes loot bags full of money buy the loyalty of our local officials. Systems loss is when we have to pay for her junkets and trips that amount to nothing. Systems loss is when we spend millions of dollars for embassies which do not look after the welfare of our migrant workers. Systems loss is when politicians use their pork barrels for their personal gains and promotion. Systems loss is when we have to pay for overpriced projects which are substandard. Systems loss is when government pushes for projects we don’t really need.

I am very sure there are more systems loss being charged to us by this corrupt and inept administration. Hidden under the rug are billions of unexplained expenditures which this administration has yet to account for. It is Gloria’s politicking that is destroying this country. Because she needs to make her allies happy and loyal, we have to bear the brunt of their systems loss. Meralco maybe abusing us but we should not be blinded by Gloria’s populist rhetorics. GMA and her gang should refund to us the systems loss of this administration.

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About The Author: Schumey is an idealist who will not sit idly by, while his country is ravaged. He blogs at The Philippine Experience.

Filed Under Business and Economy, National News

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Comments

14 Responses to “Systems Loss”

  1. Pochero on May 23rd, 2008 9:58 am

    Will “systems loss” now be the new term for “tong-pats”, bribes, and “lagays”? As in, government contracts usually have a systems loss of thirty percent.

    In any case, we can expect more of the same from an illegitimate president. One who has stolen the vote will find no compunction, indeed will find it even necessary, to steal everything else to keep herself on her pilfered seat of power.

    Given this example, all and sundry in the government behave in the same rent-seeking fashion. It is now the SOP from the lowly fireman, traffic enforcer, or clerk all the way up to the supposedly highest office in the land.

    I honestly have no idea how we can resist this emerging “culture of impunity”. But resist we must as they say.

  2. Jon Limjap on May 23rd, 2008 10:10 am

    Schumey,

    Nick, who has been commenting here a lot, is a power industry consultant of different IPPs. I’ll wait for his explanation on these issues because, as I glean from him, while systems loss is not unique to our country, the method of charging it might indeed be flawed.

    I’ll tell him about this topic.

  3. Jon Limjap on May 23rd, 2008 10:14 am

    ^^Oops.

    Just to make it clear, I’m not talking about Nick as in tingog, but rather, Nick Nichols of http://nich3.net/

    Hmmm… I think I did confuse him with Nick as in tingog when I said he commented here a lot. :P

  4. Nick Nichols on May 23rd, 2008 2:49 pm

    Well, I don’t think Schumey’s post is about Meralco’s system loss. The post is about a very interesting metaphor with it, however. Nice.

    But I’ll bite anyway and throw in a few items re Meralco. First, right or wrong, EPIRA itself specifically recognized that costs eligible to be passed on to end-users includes system losses (Sec. 43 (f)). Second, the ERC went through a long (almost a year) public process (including hearings and workshops and publication in newspapers) to discuss and finalize their rules and regulations regarding the allowance of system losses - all this in 2003 & 2004. So it’s no secret in the industry that this is done nor how it’s done.

    Systems Losses are segregated into three components:

    1. Technical losses (line losses, or the electrical efficiency losses involved in transmitting current from point A to point B).

    2. Pilferage

    3. Administrative Loss (a bad moniker - this is electricity that is necessary forits own operations, which is actually an operating expense. The impact on consumer is same whether it’s considered op ex or loss).

    Plus, the ERC sets a cap on each of these components for each utility. Plus the ERC sets a cap on the total loss recoverable.

    Here are the ERC Guidelines on Loss recovery.

  5. Jon Limjap on May 23rd, 2008 4:04 pm

    Nick Nichols,

    I purposedly had you explain the basics because I wasn’t so sure if the analogy was correct. ;)

  6. Nick Nichols on May 23rd, 2008 5:51 pm

    Jon - Yeah. And breaking the ERC system losses down into 3 components makes the analogy easier to test. Here’s my attempt at identifying the comparables:

    Corruption = Pilferage

    Ballooning debt payments = no good analogue. Kind of like Own Use except they’ve mortgaged our children’s future to pay for most of it.

    Small importers pay, smuggles don’t = pilferage

    Bribes, junkets = ?? maybe pilferage

    Ineffective embassies = own use that exceeds the cap (?)

    Pork for personal gain = pilferage

    Overpriced projects - own use that exceeds cap?

    Except for pilferage, it’s hard to carry on the analogy. But even pilferage is not quite the same. Most (not all) of the items mentioned in the post that equate to pilferage are carried out by the government. No one (ok, one Senator residing in UP Village I believe) is accusing Meralco of pilfering. Meralco is having to fight the pilferage and then recover what they can’t control.

  7. Nick on May 23rd, 2008 6:32 pm

    Nick N., so, maybe the analogy should be pilferage? Yeah, now I know why Schumey would choose system loss as his title, sounds more poetic doesn’t it..

    In any case, we understand the main idea of Schumey’s article, a great “pilferage” in progress..

  8. TonGuE-tWisTeD on May 25th, 2008 1:45 am

    Schumey,
    I was writing a comment to this post but it came out too long I decided to publish it in my blog entitled “Should We Pay Meralco’s Systems Loss Charge?” in a prely electrical sense, heheh.

    But YOUR systems loss is cool, should make it to Corruptionary’s Second Edition.

  9. TonGuE-tWisTeD on May 25th, 2008 1:50 am

    Slip of the TonGuE:
    prely=purely
    Sorry, I also forgot the closing bold tag.
    *********

    Nick’s link to the ERC guidelines is great. Now we know Meralco is allowed to charge their operational consumption to Administrative Systems Loss. What I got from their website is that they are allowed 1% of all purchased power for their own use but they claim they utilize and pass-on only 0.3%

  10. cvj on May 26th, 2008 12:59 am

    As i mentioned over at Schumey’s blog, while Nick Nichols called Schumey’s use of the term System Loss a ‘metaphor’, I think it’s more than that as it has a direct relation to the amount of Social Capital [Benign0’s ‘trust’] lost over the past eight years.

  11. Jon Limjap on May 26th, 2008 12:16 pm

    Nick,

    Maybe it’s all part of “operating expenses” then? Hehehe.

  12. DENNIS MENDIOLA on June 12th, 2008 3:25 pm

    i dont know what system loss is all about..can anyone explain it to me by just repliyng to this matter or post it..thanks

  13. cvj on June 12th, 2008 3:33 pm

    Dennis, a good background on Systems Loss could be found here:

    http://tongueinanew.blogspot.com/2008/05/should-we-pay-meralcos-systems-loss.html

  14. yuson on July 2nd, 2008 12:52 pm

    hey guys.. thx for your comments, it helps me to my related literature on this topic./. thx! specialy on nick… =)

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