Amid mounting concerns over high electricity bills, the country’s power sector is reviewing system loss charges after President Ferdinand R. Marcos Jr. called for measures to reduce electricity costs during his penultimate State of the Nation Address (SONA).

Manila Electric Co. (Meralco), the country’s largest distribution utility (DU), said on Tuesday, July 28, that it is studying possible reforms to system loss charges—a pass-through cost added to monthly electricity bills to recover the cost of electricity lost during transmission or through illegal connections.

Although the power giant said it supports Marcos’ call to lower electricity costs, Meralco Executive Vice President (EVP) and Chief Operating Officer (COO) Ronnie Aperocho clarified that technical power losses cannot be completely eliminated.

“System loss is not unique to any DU, but is a common operational aspect of the delivery of electricity—which affects the entire power industry,” Aperocho said.

“For Meralco’s part, we have consistently invested in system loss management initiatives, network modernization, and operational efficiencies—which enable us to maintain our system loss well below the 6.5-percent cap set by the ERC [Energy Regulatory Commission],” he elaborated, adding that any reforms must still consider the financial health of distribution utilities so they can continue upgrading infrastructure.

According to Meralco, its 12-month moving average system loss in the first quarter of 2026 stood at 5.72 percent, lower than 5.85 percent a year ago. For consumers, system loss charges account for about five percent of their monthly electricity bill.

Meralco added that it remains open to discussions as Congress works on amendments to the Electric Power Industry Reform Act (EPIRA).

“To ensure real benefits to consumers, these reforms should also support the ability of DUs and electric cooperatives (ECs) to efficiently operate, invest in infrastructure and system resilience, and deliver safe and stable electricity service,” Aperocho emphasized.

Meanwhile, the ERC and the Department of Energy (DOE) assured close coordination with stakeholders and the government in evaluating and expediting amendments to EPIRA.

“As utilities continue to modernize their networks through advanced metering systems, grid upgrades, digital technologies, and enhanced measures against electricity theft, system losses should steadily decline—allowing these efficiency gains to translate into meaningful savings for consumers while strengthening the overall performance of the power sector,” the DOE said in a statement.

Energy Secretary Sharon Garin added that the energy sector will also work on the proposed Sariling Kuryente Act, which is designed to make rooftop solar and battery energy storage systems more accessible and affordable for households.

“Our task now is to turn that vision into reality through decisive reforms, stronger investments, and sustained collaboration across government and the private sector,” the DOE chief said.

The ERC echoed the same sentiment, saying it recognizes the need to reduce unnecessary charges passed on to households.

“The ERC remains committed to fulfilling its regulatory mandate to protect consumer welfare through transparent, fair, and accountable regulation,” it said. - Gabriell Christel Galang