Sen. Erwin Tulfo on Thursday, Aug. 20, questioned whether power companies had sufficiently invested in modernizing their facilities, arguing that consumers should not bear the cost of system losses resulting from outdated infrastructure.

During a Senate Committee on Energy hearing, Tulfo said distribution utilities and other power companies may have relied too heavily on system loss charges instead of investing in upgrades to their networks.

“I don't know if you'll agree with me. Hindi sila nag-invest through the years yung capital expenditure expenses para to modernize,” Tulfo said.

“Because umasa lang po sila diyan sa systems loss na yan. Bakit ako magbabago ng linya? Sisingilin ko lang naman ito si Juan si Maria,” he added.

Tulfo made the remarks after Energy Regulatory Commission (ERC) Chairperson Atty. Francis Juan explained that distribution utilities are required to meet technical and performance standards and may be penalized for exceeding allowable system loss levels.

Juan said utilities also have an incentive to invest in capital expenditure programs to reduce system losses, particularly when their losses exceed the regulatory cap.

Tulfo, however, said consumers should not be blamed for utilities' failure to modernize their systems.

“It is not our fault, it is not the fault of the consumers na hindi sila nakapag-invest (It is not our fault; it is not the consumers’ fault that they failed to invest),” he said.

He said businesses should set aside funds for expansion and modernization rather than rely on consumers to absorb losses.

Tulfo also pointed to aging transmission lines and other facilities as possible contributors to system losses, likening outdated power infrastructure to a deteriorating highway that can hamper the movement of electricity.

The senator has been pushing for a review of the system loss charges imposed on consumers, particularly the recovery of non-technical losses such as electricity theft, illegal connections, and meter tampering.

During the hearing, Juan said the ERC could allow the recovery of system loss costs to be reduced or even set to zero, but warned that abruptly shifting the costs to distribution utilities could put some financially vulnerable electric cooperatives at risk.

Juan said a phased implementation may instead be considered to give utilities time to adjust if system loss recovery is eventually prohibited.

Tulfo maintained that the burden should not simply be passed on to consumers and questioned whether power companies would actually face bankruptcy if system loss charges were removed.

Tulfo pressed the ERC on whether electricity distributors, transmission firms, and generation companies could absorb system loss costs if consumers were no longer charged for them.

Juan said the government could prohibit or reduce the recovery of both technical and non-technical system losses, but warned that the impact on utilities would have to be considered.

Juan said technical losses from the transmission and distribution of electricity could not be completely eliminated, while non-technical losses, including electricity theft and billing errors, could be minimized. He said the government could instead require distribution utilities to shoulder the costs, but suggested that any policy change could be implemented gradually to give utilities time to adjust.

Tulfo, however, questioned claims that utilities would suffer severe financial losses if system loss charges were removed, asking whether major players such as Meralco and the National Grid Corporation of the Philippines, as well as electric cooperatives, would actually face bankruptcy or closure.

Juan said distribution utilities have varying levels of system losses and financial performance. While some are operating within or below the limits set by the ERC, others—particularly electric cooperatives with high system losses—already absorb part of the costs and could face greater financial difficulties if they are required to shoulder more.