The Energy Regulatory Commission (ERC) stands ready to immediately enforce a ban on passing system loss charges to power consumers if Congress passes amendments to the Electric Power Industry Reform Act (EPIRA).
ERC Chairperson Francis Juan affirmed the regulator’s commitment during a Senate Committee on Energy hearing on Thursday, July 30, following President Ferdinand Marcos Jr.’s call in his State of the Nation Address (SONA) to remove system loss fees from electricity bills.
“Kung ito po ay ang ipaguutos ng batas sa pamamagitan ng pag-amyenda at hindi na maaaring masingil yung gastusin na associated doon sa systems loss, ito po ay aming i-implementa nang buong-buo nang naaayon doon sa amyenda,” Juan said.
However, the proposal has sparked concern across the power sector regarding its impact on distribution utilities.
Juan clarified that system loss expenses stem from purchasing power from generation companies rather than core distribution services, which utilities currently recover from customers via a pass-through mechanism to cover technical and non-technical losses.
“Ito pong systems loss, ito ay associated hindi doon sa kanyang negosyo ng distribution kundi doon sa pag-procure nya ng generation ng supply at ito naman ang kanyang idine-deliver sa kanyang mga consumers,” Juan explained.
Acknowledging that technical losses are inherently unavoidable in electricity delivery, Juan noted that lawmakers must establish a framework to reallocate these costs if consumers are exempted.
“Kakailanganin lang ng pagdedesisyon kung ano ang magiging mekanismo para ito ay mapaghatian o kaya yung burden ay mapasan hindi ng mga consumers,” he added.
Industry figures estimate that barring system loss recovery could cost distributors and generators up to $1 billion (around ₱60 billion) every year.
Despite these operational concerns, the ERC reiterated its commitment to enforce whatever statutory changes Congress enacts.