System losses and market discipline: Reforming loss recovery, utility accountability, and Philippine power market design

Power supply includes fixed-cost recovery, variable operating costs, fuel where applicable, and efficient technical losses required to operate the network. Once that question is framed correctly, system losses cease to be a billing controversy and become a test of regulatory architecture. The decisive distinction is between efficient technical losses and avoidable commercial losses. WHY ‘SYSTEM LOSSES’ ARE MIS-PERCEIVED AS ‘CRISES’This distinction explains why system losses are often misread as a crisis. The issue is not that electricity networks incur losses; efficient technical losses are unavoidable.