Filipino consumers could see lower electricity bills within a year as the Department of Energy (DOE) moves to reduce system loss charges, targeting to roll out reforms before President Ferdinand Marcos Jr.’s final State of the Nation Address next year.
Energy Secretary Sharon Garin noted that while policies can be issued quickly, households will feel the savings only after distribution utilities (DUs) adjust their operations.
“It’s not going to be easy. We can issue policies, but the implementation on the distribution utility (DU) side will take time,” Garin told reporters in a press briefing on Tuesday, July 28.
To prevent the planned adjustments from accidentally driving up other components of the power bill, the DOE will coordinate with the Energy Regulatory Commission and the National Electrification Administration.
According to Energy Undersecretary Mario Marasigan, eliminating system loss charges could cut household electricity bills by about 5% to 10%.
System losses stem from two sources: technical losses caused by aging grid infrastructure and equipment, and non-technical losses resulting from electricity theft and pilferage. Managing non-technical losses falls on DUs and electric cooperatives through local anti-pilferage measures.
Current regulations limit system loss recovery based on the type of utility:
- Private DUs: Capped at 6.5%
- On-grid electric cooperatives: Capped at 8.5%
- Off-grid utilities: Capped at over 10%
“Within those thresholds, consumers pay. But beyond that, it should be the ECs or DUs that pay for it,” Marasigan explained.
Responding to the proposed reforms, the Manila Electric Company (Meralco) emphasized that technical losses are impossible to eliminate completely.
The nation’s largest power distributor urged policymakers to protect the financial viability of utilities so they can continue upgrading network infrastructure and maintaining service quality.