DOE targets 4% cut in cooperative power bills

By Francis Allan L. Angelo

The Department of Energy is targeting the removal of nontechnical system losses that could cut electricity bills for consumers served by electric cooperatives by about 3% to 4%, as the government moves to curb electricity theft, illegal connections, meter tampering, and other improperly accounted-for power use.

The effort could provide direct relief to households and businesses because consumers currently shoulder allowable system loss charges through their electricity bills. Cutting preventable losses would reduce the amount legitimate customers pay for electricity that is stolen, improperly metered, or otherwise unaccounted for.

Energy Undersecretary Rowena Cristina L. Guevara said electric cooperatives currently record average system losses of about 10.45%, with roughly 3% to 4% coming from nontechnical losses.

Technical losses account for more than 6% of electricity distributed by electric cooperatives, making up the larger share of total system losses.

Private distribution utilities generally record lower nontechnical losses of around 1% to 1.5%, according to Guevara.

“If we remove the non-technical system loss, for those who are connected to the co-ops, that is about 3 to 4% will be deducted from their bill,” Guevara said during a DOE press conference on Monday.

System loss refers to the difference between the electricity delivered to a distribution system and the electricity ultimately delivered to end-users.

Nontechnical system losses arise from electricity theft, illegal connections, meter tampering, weak billing and collection, and other factors unrelated to the physical movement of electricity through the distribution network.

Technical system losses occur because of physical factors such as electrical resistance and heat generated in wires, transformers, and other distribution equipment.

President Ferdinand R. Marcos Jr. called for removing system loss charges in his 2026 State of the Nation Address to ease the burden on consumers amid high electricity costs.

The DOE is prioritizing nontechnical losses because officials said these can be addressed more quickly and without the major infrastructure investments required to reduce technical losses.

“We will prioritize the nontechnical system losses first because those are the ones we can address quickly. There is not much analysis needed because meters with problems are easy to identify,” Guevara said.

The DOE’s broader System Loss Reduction Action Plan will be carried out in four stages targeting reductions of 25%, 50%, 75%, and ultimately 100% in nontechnical losses.

The government has allocated PHP 4 billion for the first phase, which targets a 25% reduction in nontechnical system losses.

Another PHP 1 billion is planned for the second phase, which aims to bring the reduction to 50%. A further PHP 1 billion is earmarked for the third phase, which targets a 75% reduction.

The final PHP 1.5 billion is intended to support eliminating the remaining nontechnical system losses.

The four phases amount to PHP 7.5 billion in planned funding.

Energy Secretary Sharon S. Garin separately said the government had initially estimated that around PHP 7 billion would be needed to implement the nontechnical loss reduction program for electric cooperatives.

“We have just finished the estimates, and we are looking for the sources, and we will talk to the Department of Budget and Management (DBM) and the Executive Secretary for sourcing of this,” Garin said.

Garin said possible funding sources include National Government funds and loans.

“This system loss action plan will be reinforced by a broader package of policy and institutional measures. This includes stronger coordination with the Department of Energy (DoE), National Electrification Administration (NEA), Energy Regulatory Commission (ERC), electric cooperatives, and private distribution utilities on pilferage enforcement,” she said during a briefing.

The program will focus on seven key areas: anti-pilferage enforcement, consumer education and information, education and communication campaigns, billing and collection efficiency, meter management and auditing, consumer database cleansing, institutional strengthening, and policy and regulatory reforms.

DOE officials said investments may also be needed to improve electricity meters and billing systems, making them harder to manipulate and ensuring consumers are properly recorded and billed.

The National Electrification Administration is expected to lead the program, while electric cooperatives will implement the measures in their respective service areas.

More advanced electric cooperatives may also assist those lagging in efforts to control system losses.

Private distribution utilities such as Manila Electric Co. will have to seek approval from the Energy Regulatory Commission for their respective programs to reduce nontechnical system loss charges to consumers, according to Guevara.

DOE officials set a rough timeline for reducing nontechnical losses at about one year, although Garin said implementation would depend on funding availability and could potentially be completed sooner.

Guevara said nontechnical system losses should already be reduced by 50% by the time Marcos delivers his next SONA in July 2027.

The target is later than the DOE’s earlier projection that it could remove the system loss charge from electricity bills before the President’s next SONA.

As part of the effort, the DOE launched “Brigada Kontra Jumper,” which allows consumers to report suspected illegal electrical connections, jumpers, tampered electricity meters, and electrical safety hazards through the eGovPH platform.

Garin said consumers should submit photographs and complete details when reporting suspected electricity theft, although reports may be made anonymously.

“Electricity theft is not a victimless act. Illegal connections and meter tampering contribute to losses in the distribution system, with legitimate consumers potentially bearing part of the cost,” Ms. Garin said.

“Through Brigada Kontra Jumper, we are bringing government, utilities, and consumers together to address this problem more decisively,” she added.

The DOE said Brigada Kontra Jumper forms part of its broader System Loss Reduction Action Plan.

The initiative is also intended to strengthen coordination with the Department of the Interior and Local Government, the Philippine National Police, NEA, electric cooperatives, and private distribution utilities to enforce measures against electricity pilferage.

Garin said the department is also working on amendments to existing anti-pilferage laws, including a proposal to increase a cited penalty from PHP 5,000 to PHP 50,000.

Technical system losses will take longer to address because they are tied to the physical characteristics, design, and condition of electricity distribution networks.

Guevara said technical losses cannot be completely eliminated but can be reduced through investments and improvements in distribution system design.

Measures being considered include rerouting and increasing the capacity of sub-transmission lines and primary feeders.

The plan will also examine the optimal location and capacity of substations, secondary lines, and capacitors, as well as measures to strengthen voltage control.

The DOE, NEA, ERC, and electric cooperatives are expected to prepare distribution development plans during the first half of 2027.

The plans are targeted for submission to the ERC through the NEA for approval in July 2027.

“It would take two to three years before we could minimize technical system loss,” Ms. Garin said.

The longer timetable means the government’s goal of removing both nontechnical and technical system loss charges will extend beyond the initial campaign against electricity theft.

For consumers, the immediate impact will depend on how quickly the government can secure funding, reduce preventable losses, obtain necessary regulatory approvals, and translate those reductions into lower electricity bills.