Philippines ERC considers scrapping electricity system-loss charges

The Energy Regulatory Commission (ERC) is considering policies that could bar power distributors from passing system-loss costs—both technical and non-technical—on to consumers. During a Senate Committee on Energy hearing, ERC Chairperson Francis Juan noted that while such recovery could be zeroed out, the implementation might require a phased approach to prevent financially vulnerable utilities from facing bankruptcy.

Technical losses occur naturally during electricity transmission, while non-technical losses involve issues like meter tampering and illegal connections. Senator Erwin Tulfo raised concerns regarding whether forcing companies to absorb these costs would threaten the viability of major entities like Meralco or the National Grid Corporation of the Philippines (NGCP).

In a related development, the ERC cleared Negros Power of a reported breach regarding system loss limits. The commission admitted it had wrongly labeled the company as noncompliant, clarifying that because Negros Power is in a transition period under its legislative franchise, its applicable interim cap for 2025 is 8.50 percent rather than the standard 5.50 percent. Consequently, its reported 7.5 percent feeder loss is within the allowable limit.