No way to abolish system loss

By Herbert Vego

“WE, the people, request — no, we demand — the immediate amendment of the EPIRA to prohibit charging system loss to consumers, including the value-added tax thereon,” President Ferdinand Marcos Jr. said in his State of the Nation Address (SONA) on Monday.

EPIRA is an acronym for the Electric Power Industry Reform Act, also known as Republic Act No. 9136, which privatized the state-run power sector and created the Energy Regulatory Commission (ERC).

System loss refers to electricity lost in power lines before reaching end users’ electric meters, including power lost to pilferage.

It is therefore impossible to abolish system loss.

What is being sought through an amendment to EPIRA is the abolition of the additional amount passed on to consumers.

Removing system loss charges from consumers’ electricity bills may initially appear beneficial, but it would have painful consequences for the DUs, according to our resource person, Jonathan Cabrera.

Although he is the PR representative of Iloilo City’s DU, MORE Electric and Power Corp. (MORE Power), Cabrera answered our question in his personal capacity.

We asked, “What happens if all distribution utilities remove the system loss charges?”

“Kawawa sila,” Cabrera answered, referring to the electric cooperatives.

“Since they are nonstock entities, they have no other sources of funds to cover distribution charges.

“How much is their system loss?

“Where will they get the funds to recover that loss if they are not allowed to charge it to consumers?

“What operating expenditure items will be affected?

“In the end, power consumers will suffer from worse brownouts, inconvenience, and business losses.”

There are two major types of system loss — technical and nontechnical.

Technical losses naturally occur as electricity passes through transmission lines, transformers, substations, and distribution wires.

These losses are unavoidable because of electrical resistance in every power system worldwide.

Nontechnical losses arise from electricity theft, meter tampering, illegal connections, faulty meters, and billing errors.

Currently, the Energy Regulatory Commission allows only system losses within prescribed caps to be recovered from consumers.

Losses beyond the regulatory limits are generally absorbed by the distribution utility or electric cooperative.

Private DUs such as MORE Power, Negros Power, Bohol Light, VECO, and Davao Light, among others, are allowed a cap of 5.50%.

The regulatory limits for electric cooperatives range from 8.25% to 10.25%, as allowed by the ERC.

In summary, if system loss charges are abolished, consumers would immediately pay less because one component of the electricity bill would disappear.

For households, this could reduce bills by several centavos per kilowatt-hour (kWh).

It would motivate distribution utilities to find ways to reduce electricity theft, upgrade aging facilities, improve metering systems, and modernize operations because every kilowatt-hour lost would directly reduce their revenue.

However, the long-term consequences could cause financial stress for many electric cooperatives that already operate on thin financial margins.

Without recovering allowable system losses, they would have to reduce maintenance costs, defer equipment replacement, and incur more debt, thus threatening their operational sustainability.

A question for the electric cooperatives: Are you capable of responding to the president’s challenge?

-oOo-

Goodbye, Mommy Lucring, 100

It is with mixed emotions that we accept the passing of an old woman whom we fondly called “Mommy Lucring.”

Lucrecia Sarador-Bayombong of San Jose, Antique, passed away at age 100 on July 21, 2026.

Her passing came after she fulfilled a dream that very few achieve — reaching 100 years old.

She was born on March 16, 1926.

Once, I asked her the secret to her long life.

“Laswa eh,” she laughed, “plus a bottle of beer after dinner.”

Her remains may now be viewed at Fonus Cooperatives in Atabay, San Jose, Antique.

Interment is scheduled for Friday, July 31, after a 3 p.m. Mass at St. Joseph Cathedral in San Jose, Antique.

A widow, she is survived by her sons, Belmar and Joemar, and their families.

Four other children who passed away before her were Oscar, Elmor, Evelyn, and Merlyn.