Photo courtesy of Avito Dalan/PNA
A Senate hearing renewed scrutiny of system loss charges on electricity bills as lawmakers pressed for safeguards against avoidable losses without weakening the financial capacity of distribution utilities.
Sen. Erwin Tulfo said reforms should preserve a reliable and financially stable power sector while ensuring that consumers do not end up paying for inefficiencies that utilities can prevent or control.
The hearing focused on the distinction between technical and nontechnical losses. Technical losses occur as electricity moves through power lines, transformers and substations, while nontechnical losses stem from electricity theft, illegal connections, meter tampering and other irregularities.
Energy officials and industry representatives said technical losses cannot be eliminated completely, but utilities can reduce them through better equipment, improved network design and additional substations. Consumer groups, meanwhile, raised concerns over charges linked to losses caused by theft and other preventable activities.
The Energy Regulatory Commission said system loss limits should take into account the different conditions faced by power distributors. Geography, feeder length, customer density and network configuration can affect losses, especially in remote islands and rural communities.
Meralco reported that its feeder system loss had fallen to 4.22 percent in 2025 from 21.01 percent in 1986, while its nontechnical loss had dropped below 1 percent. The company said losses beyond the approved regulatory cap were shouldered by the utility and were not automatically passed on to customers.
Electric cooperatives also asked lawmakers to consider their operating conditions, particularly in areas where long distribution lines serve relatively few consumers. The Department of Energy said it had been working with the ERC, the National Electrification Administration and power distributors on updated standards and stronger measures against electricity theft.
The hearing underscored that the proposed reforms were aimed at improving accountability rather than eliminating all system loss charges. Technical losses remain part of electricity distribution, but regulators and lawmakers are seeking tighter controls so consumers are not charged for inefficiencies that can reasonably be avoided.