ERC corrects slide that flagged Negros Power system loss

By Francis Allan L. Angelo

ILOILO CITY – The Energy Regulatory Commission has walked back its own finding that Negros Electric and Power Corp. breached the system loss ceiling for private distribution utilities last year, saying the presentation slide that placed the Bacolod-based utility on that list measured it against the wrong cap.

In an erratum issued through its official channels, the commission said a recent ERC presentation on the System Loss Performance of Distribution Utilities listed NEPC among the utilities that exceeded their feeder loss cap in 2025, showing a feeder loss of 7.5% against a cap of 5.50%.

The slide implied NEPC was non-compliant. The commission now says it was not.

“NEPC’s applicable cap for 2025 is therefore 8.50% (interim), not 5.50%,” the erratum read. “Against this interim cap, NEPC’s reported 2025 feeder loss of 7.5% is within, not in excess of, its applicable cap.”

NEPC is classified as a private distribution utility, and the long-term system loss cap for private utilities under existing ERC rules is 5.50%. The commission said the complication is that NEPC received its franchise and Certificate of Public Convenience and Necessity only recently, after taking over the operations of an electric cooperative that had been allowed a higher cap.

Republic Act No. 12011, the 25-year legislative franchise signed by President Ferdinand Marcos Jr. on July 26, 2024, gives the company room to get there.

Section 16 of the law provides that the grantee “shall comply with the system loss cap prescribed for private distribution utilities within the transition period determined by the ERC: Provided, That such transition period shall not exceed five (5) years from the grant of the Grantee’s CPCN: Provided, further, That within six (6) months from the issuance of the CPCN, the Grantee shall submit to the ERC a proposed implementation strategy including the estimated rate impact on consumers to achieve the prescribed system loss cap within such transition period.”

The commission said its own issuance in ERC Case No. 2024-037 MC, dated Oct. 16, 2024, carries the same instruction: “NEPC shall comply with the interim SL cap of 8.50% or actual, whichever is lower. NEPC must transition to the cap for private DUs which is set at 5.50%, no later than five (5) years from the grant of its CPCN in accordance with its franchise.”

That docket is NEPC’s CPCN case. Counting five years from the Oct. 16, 2024 grant places the deadline for full compliance with the 5.50% private utility cap in October 2029.

NEPC began operating the franchise area of the Central Negros Electric Cooperative in August 2024 under a joint venture in which Primelectric Holdings Inc., the Enrique Razon Jr.-backed parent of Iloilo City’s MORE Electric and Power Corp., holds 70% and CENECO holds 30%. The utility serves more than 220,000 customers in the cities of Bacolod, Silay, Talisay, and Bago and the municipalities of Murcia and Don Salvador Benedicto.

It inherited a grid with heavy losses. NEPC reported system loss of 11.84% in August 2024, its first month of operations, falling to 8.28% in April 2025 and 8.03% in May 2025, after replacing more than 13,000 outdated meters and running 1,704 enforcement operations that uncovered 789 illegal connections and 1,156 unauthorized load-side connections between November 2024 and June 2025.

“Our strategy is clear: clean up the grid, modernize our systems, and uphold accountability,” NEPC president and chief executive officer Roel Castro said in July 2025.

The company has since announced a PHP 2.1 billion modernization program targeted for completion in 2029, of which about PHP 1.2 billion has been spent. The package includes PHP 79 million for an underground distribution system along Lacson Street in Bacolod and PHP 250 million for electrification of 232 underserved communities.

The timing of the disputed slide explains why the correction matters. The ERC presented its system loss data to a joint hearing of the Senate committees on energy and public services on Aug. 13, at a moment when the charge itself is under political attack.

President Marcos used his fifth State of the Nation Address on July 28 to ask Congress to strike system loss charges, and the 12% value-added tax on them, from consumer bills. Senate President Sherwin Gatchalian filed Senate Bill 2350, the System Loss Charge Abolition Act, on July 29, citing an average burden of PHP 148.95 a month for a household consuming 200 kilowatt-hours. Speaker Faustino Dy and Majority Leader Sandro Marcos filed House Bill 10340 on Aug. 3.

ERC Chairperson and Chief Executive Officer Francis Saturnino Juan has told senators the commission supports lowering the burden but has warned that scrapping the charge outright would strain electric cooperatives. He has floated waiving recovery of non-technical losses for utilities that consistently stay within their caps.

Energy Secretary Sharon Garin has said full removal would require an amendment to the Electric Power Industry Reform Act and could take until 2027.