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Distribution utilities will not incur losses from the removal of the non-technical system loss charge.
This was stressed by the Energy Regulatory Commission (ERC) and the Department of Energy (DOE) during a Senate hearing on the proposal to stop passing on to consumers the costs arising from îllégâl connections, jumpers, and other forms of pilferage.
According to the ERC, while distribution utilities' income may be reduced, this will not cause them to suffer losses or go bankrupt, since non-technical system loss makes up only a small portion of the total system loss.
ERC Chairperson Atty. Francis Saturnino Juan said non-technical system loss represents about 1 to 1.5% of a distribution utility's total system loss, and while removing it would represent a reduction in their income, this is small compared to their total system loss.
The Commission further stressed that power losses due to jumpers and îllégâl connections should be addressed directly by the distribution utilities themselves, and should no longer be passed on to consumers who pay properly.
The DOE also agreed with this, saying it would serve as a self-regulating mechanism that would encourage distribution utilities and electric cooperatives to improve their operations and intensify the apprehension of electricity thieves using their own funds.
However, Meralco opposed the proposal.
The company stressed that if non-technical system loss were reduced to zero, they would need bigger expenses for inspection and monitoring against îllégâl connections, which could also result in higher operating costs.
Atty. Jose Ronald Valles of Manila Electric Company (Meralco) said they have already taken all steps to lower non-technical loss, including raising meters in some depressed areas to make them harder to reach, yet non-technical losses still occur.
He said that if the goal is to fully eradicate non-technical loss, they would need to add more personnel to inspect these homes 24/7 and to patrol and guard every one-kilometer stretch of posts, which would be very costly.
Meanwhile, Senate President Sherwin Gatchalian stressed that the cost of system loss should not be passed on to consumers, which is why he is now having the DOE and ERC prepare the necessary information to push forward proposals that would remove the non-technical system loss charge.
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Date posted: July 31, 2026 12:09 PM