Visayas power supply stabilizing, but problems persist

By Herbert Vego

BASED on newspaper reports, power supply in the Visayas is gradually stabilizing as major power plants — notably the KEPCO-SPC Power Corp. in Naga City, Cebu, and Therma Visayas in Toledo City — return to service.

However, as the transmission grid operator, the National Grid Corporation of the Philippines (NGCP) can only deliver a restricted load of electricity from the power plants to local distribution utilities across the country.

When electricity consumption exceeds what power plants and the grid can supply (an overload), the system loses balance, causing frequency drops, equipment damage, and automatic shutdowns.

Hence, peak consumer demand may still outpace available generation margins, resulting in manual load dropping by distribution utilities.

Already, supply disruptions have pushed up generation charges on local utility bills.

Because of that, I personally feel that enacting a law disallowing payment for system loss would not end the agony of end users.

Enacting such a law, remember, was one of the proposals that President Ferdinand Marcos Jr. addressed to Congress during his fifth State of the Nation Address (SONA) on July 27, 2026.

But can it be done when system loss can’t be avoided in the first place?

If it can be done, then households would no longer shoulder losses from technical inefficiencies or electricity theft.

Marcos’ directive covers the removal of the entire system loss charge from consumers’ bills — including both technical and nontechnical losses — along with the VAT imposed on that charge, not the VAT on the entire electricity bill.

System loss refers to the energy that disappears as electricity moves through the grid before reaching your home or business. It is split into two main categories:

One is technical loss, in which a portion of energy is lost as it travels through wires and transformers due to physical rules. This is difficult to avoid completely.

The other is nontechnical loss, or energy presumed lost from electricity theft, meter tampering, or billing errors.

Since system loss is impossible to eliminate, why is it included in the bill to be paid by power consumers? Why must we pay for that which we do not benefit from?

Under Section 43(f) of the Electric Power Industry Reform Act (EPIRA or Republic Act No. 9136), private distribution utilities and electric cooperatives are legally permitted to recover system losses up to a “cap,” which is a portion of electricity lost during delivery.

That is why the Energy Regulatory Commission (ERC) has set maximum caps on recoverable system loss, such as 5.5% for MORE Power in Iloilo City and 8.25% for other distribution utilities (DUs) or electric cooperatives. Consumers pay for system losses that exceed these caps.

The DUs also act as collectors tasked with remitting payments to power generators.

Therefore, a presumed future law eliminating billing for system loss would be good for power consumers but could result in financial losses for the DUs, especially the cooperatives victimized by power thieves or pilferers.

Based on our conversation with Wilfred Billena, retired general manager of the Iloilo Electric Cooperative 1 (ILECO 1), it would be impossible for the DUs to abolish system loss charges because system loss itself could not be avoided.

However, it could be minimized with responsible action from the DUs, as MORE Power did when it took over the distribution franchise from its predecessor. According to its president, Roel Z. Castro, the company discovered an initial 5,000 “jumpers” installed by pilferers when it took over in 2020.

As a law, the EPIRA (Republic Act No. 9136) has failed to fulfill its primary objective of restructuring the industry for free-market competition and eliminating power shortages.

Since there are already around 260 power plants in the Philippines, it is disturbing that the big ones conk out at the same time, thus triggering power shortages.

President Marcos should do more than merely announce an impossible solution to the power problem.