President Ferdinand R. Marcos Jr. has called on Congress to immediately amend the Electric Power Industry Reform Act (EPIRA) of 2001 to stop system loss charges and their corresponding value-added tax from being passed on to electricity consumers.

Marcos made the call during his fifth State of the Nation Address on July 27 as part of the government’s push to reduce electricity costs for Filipino households and businesses.

“At kung pagbawas ng presyo ang usapan, sa aking palagay panahon na para tanggalin na natin ang system loss na pinapasa sa consumer,” Marcos said.

He argued that consumers should not be required to pay for electricity losses they did not cause, particularly when the amount included in their bills is also subject to value-added tax.

“Hindi naman kasalanan ng consumer kung bakit nagkaroon ng system loss. Kaya hindi naman tama na kailangan sila pa ang pagbabayarin dito,” the President said.

System loss refers to electricity lost while being transported through transmission and distribution networks before reaching customers. It may result from technical factors within the power system or non-technical causes such as illegal connections and metering problems.

The Energy Regulatory Commission (ERC) welcomed the President’s call and expressed support for policy reforms that prioritize electricity consumers and reduce unnecessary costs.

The regulator said reforms must also preserve the viability of distribution utilities and support an efficient, affordable, and reliable power sector.

The ERC added that it is prepared to work with Congress, the Department of Energy, industry stakeholders, and other government agencies on the legal and regulatory measures needed to advance the proposal.

It said efforts to reduce electricity rates should not compromise the quality, reliability, and sustainability of electric service.

Manila Electric Company (Meralco), meanwhile, said it respects the President’s policy direction and will participate in discussions as lawmakers deliberate on the proposed EPIRA amendments.

Meralco Executive Vice President and Chief Operating Officer Engineer Ronnie L. Aperocho said system loss is not unique to any distribution utility but is a common operational aspect of delivering electricity.

“While distribution utilities like Meralco continue to invest in modernizing and upgrading facilities and deploying technologies that reduce system losses, a certain level of technical losses remains inherent in operating an electric distribution system,” Aperocho said.

Meralco said it has invested in system loss management, network modernization, and operational improvements that have allowed it to keep its system loss below the 6.5% cap set by the ERC.

The utility said discussions should carefully consider how the proposed reforms could affect the operations and sustainability of distribution utilities and electric cooperatives.

It added that the changes should preserve their ability to operate efficiently, invest in infrastructure and system resilience, and deliver safe and stable electricity service.

Marcos also urged Congress to immediately pass the proposed Sariling Kuryente Act, which seeks to simplify and reduce the cost of installing solar panels and battery storage systems in homes.

The measure is intended to allow more Filipino families to generate their own electricity and potentially reduce their dependence on power supplied through the grid.

Can Congress remove system loss charges from consumer bills while preserving the investments needed to maintain reliable electricity distribution?

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