Several bills seeking to remove system loss charges on electric bills have been filed before the House of Representatives, days after President Marcos’ fifth State of the Nation Address (Sona), where he asked Congress to pursue a bill on this matter.
In a statement on Thursday, Navotas Rep. Toby Tiangco said he has refiled House Bill (HB) No. 10273 or the proposed System Loss Charges Abolition Act of 2026, in response to Marcos’ Sona speech where he said that households must not be made to shoulder costs stemming from inefficiencies in the power distribution system.
‘Natutuwa ako na ang panukalang ito ay malinaw nang bahagi ng legislative agenda ng Pangulo. Matagal na nating sinasabi na hindi makatarungan na ang ordinaryong konsyumer ang pinagbabayad sa mga nananakaw ng kuryente at inefficiencies na wala naman silang kinalaman,’ Tiangco said.
(I am happy that this proposal is now clearly part of the President’s legislative agenda. We have long been saying that it is not just for ordinary consumers to shoulder the costs brought by electric theft and inefficiencies that they are not responsible for.)
‘Magmula taong 2010, hindi ito umusad. Ngayon, malinaw na kinikilala na mismo ng Pangulo na dapat nang itigil ang pagpapasa ng systems loss sa mga konsyumer. Umaasa ako na sa Kongresong ito ay magkakaroon na tayo ng sapat na political will upang maisabatas ang repormang ito,’ he added.
(Since 2010, this proposal has not moved forward. Now, we can clearly see that the President himself acknowledges that the passing of system loss charges to the consumer should be stopped. I hope that in this Congress, we will have enough political will to enact this reform.)
Under HB No. 10273, distribution utilities-from private distribution utilities and electric cooperatives-are allowed to ‘pass on, recover, collect, or otherwise charge to consumers, directly or indirectly, any cost attributable to system losses.’
DOE in charge
The Department of Energy and its attached agencies will be in charge of implementing the bill, should it be enacted into law.
Aside from Tiangco, Bagong Henerasyon party-list Rep. Robert Nazal also filed his own version, contained in HB No. 10357.
Like HB No. 10273, the proposed measure seeks to ban any direct or indirect recovery of the distribution system loss charges. HB No. 10357, however, also removes the value-added tax component imposed on system loss.
Both measures will amend different laws, including Republic Act No. 9136 or the Electric Power Industry Reform Act (Epira) of 2001.
‘Ang consumer ay dapat magbayad para sa kuryenteng aktuwal na naihatid sa kaniya-hindi para sa kuryenteng nawala dahil sa pagnanakaw, kakulangan sa pagpapanatili, o kahinaan ng Sistema. The entities that control the system must bear the responsibility for improving it,’ Nazal said.
(Consumers should only pay for the actual electricity provided to them – not for the power lost due to theft, shortcomings, or the weakness of a system. The entities that control the system must bear the responsibility for improving it.)
‘Ang panawagan natin sa ating mga kasamahan sa Kamara ay simulan na ang pagdinig sa panukalang pag amyenda sa EPIRA. At kung talagang seryoso ang Pangulo sa sinabi niya sa kanyang Sona dapat i-certify niya as urgent ang panukalang ito pagdating nito sa plenaryo,’ he added.
(Our call to our colleagues in Congress is to start hearing the bills seeking to amend Epira. And if the President is really serious in his Sona, he should certify this proposal as urgent once it reaches the plenary.)
Inquiry first
But before these amendments are addressed by the House, Palawan Rep. Jose Alvarez – chairperson of the House committee on energy – asked for an inquiry on system loss charges to check whether such a policy is fair, transparent, and protective of consumers.
According to Alvarez, many consumers are still confused about the system loss charge, which should prompt the House to address the matter so that people will be clarified.
‘Bago natin amyendahan o alisin ang system loss charges, kailangan munang marinig ang lahat ng panig at maipaliwanag nang malinaw sa publiko kung ano ba talaga ito at bakit ito bahagi ng electric bill,’ Alvarez said.
(Before we amend or remove the system loss charges, we need to listen first to all sides and have them clearly explain to the public what this is and why it is part of the electric bill.)
‘Ang gusto lang natin ay malinaw ang lahat. Kapag kumpleto ang impormasyon, mas makakagawa ang Kongreso ng tamang desisyon-isang desisyong makakabuti sa consumers habang tinitiyak din ang maayos at tuloy-tuloy na serbisyo ng kuryente,’ he added.
(What we want is for everything to be clear. If the information is complete, Congress will be able to craft the right decisions-a decision that will be good for consumers while ensuring that electric service will continue to be efficient.)
System loss is the difference between the power delivered to a distribution system and the actual electricity billed to consumers, driven by technical inefficiencies and electricity theft.
Since Marcos’ Sona speech on Monday, several lawmakers have called on Congress to review not only system loss charges, but Epira itself, to protect households from ‘bill shock,’ or consumers being surprised by a sudden jump in their electric bills.
Akbayan party-list Rep. Chel Diokno even challenged electric utility companies to immediately stop collecting system loss charges instead of waiting for Epira to be amended.
Epira is a landmark 2001 law that privatized and restructured the Philippine power sector into four main segments: generation, transmission, distribution, and supply.
Under this, distribution utilities are allowed to charge a portion of system losses from consumers through a systems loss charge reflected in monthly electricity bills.
But Manila Electric Co. (Meralco), the country’s biggest power distributor, said that some system losses are an ‘inherent’ part of delivering electricity.
Meralco executive vice president and COO Ronnie Aperocho said they respect President Ferdinand Marcos Jr.’s policy direction and will join discussions on proposed amendments to the Epira. However, he said that there is a ‘a certain level of technical losses’ which remain ‘inherent in operating an electric distribution system.’
Systems loss charges account for about 5 percent of Meralco bills and cover electricity lost to technical and non-technical factors. Electricity pilferage, including illegal tapping and jumper wires, usually causes non-technical losses.
‘We believe it is important to recognize that system loss is not unique to any distribution utility but is a common operational aspect of the delivery of electricity – which affects the entire power industry,’ Aperocho said.
On Wednesday, Meralco chairperson and businessman Manuel Pangilinan questioned Marcos’ proposal to scrap the system loss charge, saying the removal will entail costs ‘too big’ for power industry players to shoulder.
‘When you push electricity through the copper wires, there will be a resistance. The longer the lines are, the more the losses will be,’ Pangilinan said.
‘It is not a question of inefficiency. It is just the way it is, and there’s a cost to it. So the real question is, who bears the cost?’ he added.