Northern Samar 2nd District Representative Edwin Ongchuan has urged the Energy Regulatory Commission (ERC) to immediately reduce the system loss charges passed on to electricity consumers, saying relief should not have to wait for Congress to finish amending the country’s power sector law.
Ongchuan raised the issue during a House Committee on Energy hearing on Aug. 5, asking whether the ERC could lower the allowable system loss charges under its existing authority while lawmakers deliberate proposed amendments to the Electric Power Industry Reform Act (EPIRA).
The ERC responded that it has authority under Section 43(f) of Republic Act 9136, or the EPIRA, to determine and adjust system loss caps based on technical considerations.
This means the regulator can lower the allowable level, although completely removing system loss charges from consumers would require legislative action.
System loss refers to electricity lost in the distribution network through technical losses and other recognized losses.
Under the existing regulatory framework, distribution utilities are allowed to recover approved system losses through charges reflected in consumers’ electricity bills, subject to limits set by the ERC.
Ongchuan’s call comes amid renewed efforts to amend the 25-year-old EPIRA, particularly provisions affecting electricity costs and consumer protection.
The Department of Energy (DOE) said it supports President Ferdinand Marcos Jr.’s call to remove system loss charges and the corresponding value-added tax from consumers’ electricity bills.
The department said the proposal forms part of efforts to bring down electricity costs.
Ongchuan earlier expressed support for amending the EPIRA and removing system loss charges from electricity bills, saying consumers should not indefinitely shoulder costs associated with losses in the power distribution system.
But the discussion also raises a regulatory question: how much relief can be granted under the existing law while Congress considers changes to EPIRA?
The ERC’s position indicates that there is room to tighten the allowable system loss cap, but a complete prohibition on charging consumers for system losses cannot be imposed by regulation alone.
Ongchuan also questioned the treatment of value-added tax previously imposed on system loss charges and whether consumers could be entitled to refunds if the charges are eventually abolished.
The ERC reportedly said it had asked the Bureau of Internal Revenue to exclude system loss charges from the VAT tax base, but no favorable action had been taken.
For consumers, the issue is straightforward: any reduction in a bill component, even before Congress acts, could provide immediate relief at a time when electricity costs remain a major household and business expense.
The debate over system loss charges therefore puts pressure on both the ERC and Congress on the regulator to use whatever authority it already has to protect consumers, and on lawmakers to determine whether the existing rules under EPIRA still serve the public interest.
For ordinary people, waiting for a legislative overhaul should not prevent the government from examining what can be done now.
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