The Cebu Electricity Rights Advocates (CERA) said the cap must be uniformly imposed on both private distribution utilities (DUs) and electric cooperatives (ECs) to remove the current dual-standard policy.
A system loss cap is the government-set limit on how much electricity lost because of technical problems or theft can be passed on by power companies to consumers through their electric bills.
Under existing regulations of the Energy Regulatory Commission (ERC) regulations, private DUs such as Visayan Electric (VECO) and Mactan Electric Company (MECO) may recover up to 5.5 percent of system losses from consumers and 12.5 percent to 14 percent for electric cooperatives.
Such a policy, the group said, unfairly burdens consumers in electric cooperative franchise areas while trapping cooperatives in a cycle of underinvestment and deteriorating infrastructure.
Regulatory reforms
Based on CERA's analysis of estimated January 2026 billing data, a household consuming 200 kilowatt-hours (kWh) of electricity served by a private distribution utility would pay an estimated maximum system loss charge of P140.
A household using the same amount of electricity but served by an electric cooperative could pay about P280 in system loss charges because of the significantly higher allowable cap.
The group urged the ERC and the national government to initiate regulatory reforms that promote fairness, boost operational efficiency, and guarantee equal protection for all consumers—whether served by a private utility or an electric cooperative.
Standing ovation
Marcos received his longest standing ovation during his SONA last July 27 when he made a direct call to remove system loss charges from consumer electric bills.
Acting on the President's directive, the Department of Energy (DOE) met with the Energy Regulatory Commission (ERC) and Manila Electric Co. (Meralco) on July 28 to begin discussions on policy, regulatory, and legislative reforms.
In a statement, Energy Secretary Sharon Garin said President Marcos Jr.'s directive was clear: consumers should pay only for the electricity they actually use, not for losses they did not cause.
"Every peso saved on electricity matters to Filipino families. Our responsibility now is to work closely with our regulators, lawmakers, and the power industry to ensure that our policies better protect consumers while preserving the reliability, stability, and long-term sustainability of our power sector. Consumer protection and energy security must always go hand in hand."
The DOE, ERC, and the National Electrification Administration (NEA) are also jointly assessing how the proposed reforms would affect electric cooperatives and utilities nationwide and reviewing system loss regulations to strike a balance between strengthening consumer protection and preserving the operational stability of the power grid.
End goal
In a statement, CERA said that while removing system loss charges would be the ideal long-term goal, the proposal could face strong opposition from the power industry, potentially delaying meaningful relief for consumers.
Nathaniel Chua, CERA convenor, said a uniform cap on system loss was more realistic and easier to implement. At the same time, he said, the cap would compel electric cooperatives to prioritize system modernization while protecting provincial consumers from paying for "ghost electricity" they never used.
"We found that one primary reason for the increasing electricity rates among electric cooperatives is their high system loss cap. These losses are then transferred to consumers, resulting in disproportionately high electric bills. Why should consumers living in cooperative areas carry a heavier financial burden for technical inefficiencies than their neighbors in private distribution utility territories?" said Chua.
Higher rates
During a briefing on July 20, electric cooperatives imposed the highest power rates.
Four out of the five power distributors charging the highest electricity rates are electric cooperatives. They were Southern Leyte Electric Cooperative (Soleco) , which had the highest residential rate in June at P16.57 per kWh, followed by Northern Samar Electric Cooperative (Norsamelco) at P15.72, Kalinga Apayao Electric Cooperative (Kaelco) at P14.53, and Leyte Electric Cooperative (Leyeco) IV, at P14.46. Also in the top five was Meralco, a private power distributor which charged P14.48 per kWh.
Chua said the dual-policy imposed by ERC on systems loss creates a cycle that ultimately worsens service reliability.
"When actual losses exceed the cap, the financial hit is absorbed by the cooperative. This drains the funds meant for crucial capital expenditures, system improvements, and even manpower salaries and support. It creates a vicious cycle. The cooperative loses the budget needed to upgrade aging lines, which in turn causes even higher technical losses the following month. The generous 12.5 percent cap is acting as a crutch that enables poor infrastructure," Chua added.
CERA said addressing the disparity in system loss caps has become urgent as Cebu faces a tightening power supply and high electricity costs that strain household budgets and undermine the province's economic competitiveness. —Ed: Corrie S. Narisma
Contributor
