Meralco Urges Discussion on Marcos Plan to Scrap System Loss Charges

The Manila Electric Company (Meralco) is seeking a thorough discussion about President Ferdinand “Bongbong” Marcos Jr.’s proposal to scrap system loss charges from consumers’ electricity bills, noting its potential impact on the operational and financial health of power distribution utilities. In a statement issued Tuesday, Meralco executive vice president and chief operating officer Ronnie Aperocho said that while it respects Marcos’ policy direction, “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.” The President, in his fifth State of the Nation Address (SONA 2026), declared that it is about time to put a stop to system loss charges, including an accompanying value-added tax (VAT), from being passed on to consumers as he called on lawmakers to amend the Electric Power Industry Reform Act (EPIRA). System loss refers to electricity lost during transmission and distribution, whether caused by technical issues or illegal acts such as use of “jumpers” or pilferage. Current laws such as the EPIRA and Republic Act No. 7832 or the Anti-Pilferage of Electricity and Theft of Electric Transmission Lines/Materials Act allow distribution utilities to recover a portion of system loss from end-consumers through system loss charge reflected in monthly electricity bills. Nonetheless, Aperocho said the power distribution utility “will actively participate in the discussions as the proposed amendments to the EPIRA are deliberated.” “We look forward to productive discussions which we hope will carefully consider the impact of reforms on the operations and sustainability of distribution utilities,” he said. “To ensure real benefits to consumers, these reforms should also support the ability of distribution utilities and electric cooperatives to efficiently operate, invest in infrastructure and system resilience, and deliver safe and stable electricity service,” he added. Based on Meralco’s breakdown of charges, system loss charge, a pass-through charge, meaning it does not go directly to the company, accounts for 5% of its customer’s monthly electricity bill. “While distribution utilities like Meralco continue to invest in modernizing and upgrading facilities and deploying technologies that reduce system losses, a certain level of technical losses remains inherent in operating an electric distribution system,” Aperocho said. “For Meralco’s part, we have consistently invested in system loss management initiatives, network modernization, and operational efficiencies — which enable us to maintain our system loss well below the 6.5% cap set by the ERC,” he said. The Meralco official said the company will continue working closely with the government, regulators, legislators, and other industry stakeholders in pursuing reforms that enhance consumer protection and strengthen the power industry. — RSJ, GMA News