System loss charge proposal remains uncertain

CEBU CITY, Philippines — Consumers in Metro Cebu hoping for lower electricity bills after President Ferdinand Marcos Jr. proposed removing system loss charges may have to wait.

Visayan Electric (Veco) said on Tuesday that any impact remains uncertain until Congress amends the Electric Power Industry Reform Act (EPIRA).

“At this stage, medyo wala pa man, kay speculative pa ang savings o unsa’y impact,” Veco General Manager Engineer Mark Anthony Kindica said during a news forum.

(At this stage, we cannot say yet because any savings or impact remain speculative.)

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Furthermore, the utility firm could not further comment on the proposal’s long-term implications until Congress finalizes amendments to Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001.

“It’s really at this point medyo speculative because we don’t know unsa’y amendment sa EPIRA, unsa’y mga policy until ma-finalize na, then we can comment on that,” he said.

(At this point, everything remains speculative because we do not yet know what amendments to EPIRA or what policies Congress will approve. Once those are finalized, we can comment.)

In the meantime, Veco backed discussions with regulators to ensure any reforms benefit consumers without compromising the country’s power system.

“Para to make sure nga kung naa ma’y itangtang nga unduly burden sa customers, it’s still sustainable and in terms of reliability, same level of reliability ang atong grid,” he said.

(We want to ensure that if any charge gets removed to ease the burden on customers, the power system remains sustainable and the grid maintains the same level of reliability.)

**System loss charge **

Marcos, in his fifth State of the Nation Address (SONA), urged Congress to amend EPIRA and prohibit distribution utilities from passing system loss charges, including the corresponding value-added tax, to consumers.

The President argued that households should not shoulder costs arising from inefficiencies in electricity distribution.

System loss refers to the difference between electricity entering a distribution network and the power ultimately billed to customers.

The losses stem from two sources: technical losses, which naturally occur as electricity travels through transmission and distribution lines, and non-technical losses, which largely involve electricity theft.

Kindica said both components form part of the existing regulatory framework.

“System loss, there are two types,” he explained. “Ang technical is kanang unavoidable nga physics in delivering your power… And there’s also the non-technical loss. One component sa non-technical loss is theft.”

(Technical losses arise from the unavoidable physics involved in delivering electricity. Non-technical losses, meanwhile, include electricity theft.) / mme

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