Philippines to Scrap System Loss Charges for Consumers, Amend EPIRA

The Energy Regulatory Commission (ERC) has expressed its readiness to work with Congress on a proposal to amend the Electric Power Industry Reform Act (EPIRA) and stop power distributors from charging consumers for system losses. In a statement on Tuesday, the ERC welcomed President Ferdinand “Bongbong” Marcos Jr.'s call and affirmed its support for policy reforms that prioritize consumer welfare. "As the country’s independent electric power industry regulator, the ERC stands ready to work closely with Congress, the Department of Energy (DOE), industry stakeholders, and other concerned government agencies in advancing the legal and regulatory measures necessary to advance this reform," the commission said. President Marcos, in his fifth State of the Nation Address (SONA 2026), urged both chambers of Congress to amend the EPIRA to scrap system loss charges from electricity bills, aiming to ease the burden of rising electricity costs on Filipino households and businesses. System loss refers to electricity that is lost during transmission and distribution, whether due to technical issues or illegal activities such as the use of "jumpers" or pilferage. Current laws, including the EPIRA and Republic Act No. 7832 (Anti-Pilferage of Electricity and Theft of Electric Transmission Lines/Materials Act), allow distribution utilities to recover a portion of these losses from end-consumers through system loss charges on monthly bills. The ERC reiterated its commitment to its regulatory mandate of protecting consumer welfare through transparent, fair, and accountable regulation. The commission also acknowledged the importance of measures that reduce unnecessary costs while ensuring the financial viability of distribution utilities and promoting a more efficient, affordable, and reliable power sector. The Department of Energy has also voiced its support for the President's call to remove system loss charges. However, the Manila Electric Company (Meralco), the country's largest power distribution utility, has called for a thorough discussion on the proposal, citing its potential impact on the operational and financial health of power distribution utilities. Despite these concerns, the ERC stated that it will continue to promote efficiency and support meaningful reforms that contribute to lower electricity rates without compromising the quality, reliability, and sustainability of electric service for all Filipinos.