Senator Imee Marcos has cautioned against forcing electric cooperatives to immediately shoulder all systems loss costs, warning that efforts to reduce electricity rates should not jeopardize utilities serving millions of Filipinos in rural areas.
Her remarks come in response to her brother, President Ferdinand Marcos Jr., who called during his fifth State of the Nation Address for immediate amendments to the Electric Power Industry Reform Act (EPIRA).
The President proposed prohibiting distribution utilities from passing on systems loss charges and the corresponding value-added tax (VAT) to consumers.
While supporting the removal of VAT on remaining systems loss charges, Senator Marcos advocated for a phased implementation rather than an immediate ban. She proposed lowering the recoverable systems loss cap to five percent, requiring electric cooperatives to absorb any losses beyond that threshold.
Systems loss refers to electricity lost during transmission and distribution. It includes technical losses caused by aging power lines and transformers, as well as non-technical losses stemming from power theft, illegal hookups, and metering errors.
Under current regulations, distribution utilities are permitted to pass a portion of these costs onto paying customers.
The senator emphasized that the government must first help cooperatives modernize aging infrastructure and curb power theft before imposing a full ban.
“Ang systems loss ay parehong kawalan sa konsyumer at electric cooperatives. Bago tuluyang alisin ang systems loss charge, ayusin muna natin ang ugat ng problema,” Marcos said in a statement.
She added that addressing the root causes will naturally drive down overall costs for consumers:
“Kapag na-upgrade ang mga linya at pasilidad at walang power theft at iba pang iregularidad, kusang bababa ang systems loss at liliit din ang bayarin ng mga konsyumer.”