Who should shoulder the cost of the system loss? Definitely not the consumers, according to Senate President Sherwin Gatchalian.
At a hearing in the Senate on Thursday, Gatchalian addressed the question raised by businessman Manuel V. Pangilinan, chairman of Manila Electric Co. (Meralco), the country’s largest private electric distribution utility (DU).
‘As Mr. Pangilinan mentioned: Who should shoulder the system loss? Obviously, we do not want consumers to pay for it. That is why eight lawmakers filed bills seeking to remove the system loss charge’ Gatchalian said.
‘We believe the distribution companies should shoulder that cost. And it will be part of their cost or expense in generating electricity or in transmitting electricity,’ he said.
This way, he said, the DUs would be forced to be more efficient, noting that at present there is currently no pressure on them to reduce the system loss since they simply pass it on to consumers.
‘Now that it will become part of their costs, they will be forced to bring down-or even remove the system loss, especially its technical aspect. As for non-technical system loss, they should just work with the police or the barangays to apprehend those using illegal electricity connections. That way, non-technical system loss can be completely eliminated,’ the Senate chief said.
‘But the point of the matter there is that consumers agree this should not be passed on to us because the technical losses are not our fault. Neither are the losses caused by illegal electricity connections. We should not be made to shoulder those costs,’he added.
Gatchalian echoed President Ferdinand Marcos Jr. who called for the removal of the system loss from electricity bills during his fifth state of the nation address.
And many senators backed this proposal, according to the Senate chief, citing the eight bills that were filed in the upper chamber-all seeking to scrap at the system loss charge.
Gatchalian initially estimated the cost of the system loss being passed on to consumers nationwide to be at about P70 billion to P80 billion.
But Energy Regulatory Commission Chairperson Saturnino Juan could not confirm this, though he noted that for Meralco alone, the system loss cost P30 billion in 2025.
Including electric cooperatives, Gatchalian then adjusted his estimated system loss at P45 billion.
‘So, my question, who will absorb that 45? Again, I think that 45 can be absorbed by the distribution utilities. They just need to be efficient,’ he further said.