Consumers Welcome Marcos Jr.'s Proposal to Slash Electricity Systems Loss Charges

The proposal to remove systems loss charges from monthly electricity bills is bringing a sigh of relief to consumers across the Philippines, with many welcoming the move as a measure that could alleviate household financial burdens. Ronnie Bomediano, a former Overseas Filipino Worker (OFW) in Saudi Arabia and a consumer of Lanao del Norte Electric Cooperative Inc., said that his monthly electricity bill amounts to about P3,500. "If this will push through, it means a lot of monthly savings for us consumers, even if it's even P500 per month, that's a lot of savings for us," he told MindaNews. Lawyer Marlene Young, Iligan City Councilor and chairperson of the Iligan City Council’s Committee on Energy, said the proposal, should it materialize, would be like a "breath of fresh air." However, she added, "Let's wait and see if it will materialize." President Ferdinand R. Marcos Jr. has urged Congress to amend the Electric Power Industry Reform Act (EPIRA) so that distribution utilities can no longer pass system loss costs—including technical losses and power pilferage—onto ordinary households and businesses. Marcos said consumers should not shoulder extra financial burdens caused by system inefficiencies or illegal connections that are outside of their control. The proposal also includes removing the 12% VAT currently levied on top of these system loss charges, which Marcos said would provide consumers immediate financial relief amid high electricity costs. While Kauswagan, Lanao del Norte Vice Mayor Rommel Arnado welcomed the proposal, he also pointed out that transmission charges from the National Grid Corporation of the Philippines (NGCP) and other charges, like standby costs from other supplementary power barges, also need to be slashed. 'Stand-by' costs fall under what the NGCP calls ancillary services – or pass-through charges. These services are intended for grid stability, frequency control, and reserves, while the transmission wheeling rate refers to the cost of delivering power through the grid. All of these are strictly regulated and operate under a revenue cap set by the Energy Regulatory Commission (ERC). Iligan City Mayor Frederick W. Siao, meanwhile, said electricity is not a luxury but is an essential service that every Filipino family and every business depends on. "Consumers should have confidence that every peso they pay is fair, transparent, and justified. If there are costs arising from inefficiencies or technical losses within the power system, Congress should carefully review whether these should continue to be passed on to consumers and whether the corresponding taxes remain equitable," Siao added. "Ultimately, every Filipino deserves an energy system that is reliable, transparent, affordable, and fair," Siao concluded. (Richel V. Umel/MindaNews)