Palace Urges Power Utilities to Minimize System Loss, Shield Consumers

Malacañang has called on electricity distributors to improve their efficiency to prevent consumers from bearing the costs of system loss, stating that no discussions are ongoing regarding subsidies for affected power utilities. During his fifth State of the Nation Address (SONA) on Monday, President Marcos advocated for amendments to the Electric Power Industry Reform Act (EPIRA) to cease the passing on of system loss charges, including the corresponding value-added tax (VAT), to consumers. The President's intention is for utility companies to ensure they undertake planning and monitoring to avoid these losses, especially those resulting from theft and pilferage, which are currently shouldered by Filipinos settling their obligations. The Philippine Rural Electric Cooperatives Association Inc. (PHILRECA), representing 121 electric cooperatives nationwide, has stated its support for the complete elimination of system loss charges from electricity bills if the government directly shoulders these costs through a dedicated subsidy mechanism. However, Palace press officer Claire Castro indicated that subsidizing is not currently under discussion. Energy Secretary Sharon Garin projected that the scrapping of the system loss charge would lead to a reduction in power rates by five to 15 percent. While she initially anticipated its removal within a year, she maintained that the possibility of scrapping it sooner rather than later always exists. Conversely, Meralco chairman Manuel Pangilinan warned that the plan to scrap the system loss charge could cost power companies "tens of billions of pesos" if they are compelled to shoulder it. He argued that eliminating the charge would not make the underlying cost disappear. Despite the proposal garnering public support, concerns remain regarding the potential financial burden on power companies.