The Manila Electric Company (Meralco) has called for thorough discussions regarding President Ferdinand "Bongbong" Marcos Jr.'s proposal to eliminate the system loss charge from consumer electric bills.
Meralco Executive Vice President and Chief Operating Officer Ronnie Aperocho cautioned that while the company respects the government's policy direction, the removal of this charge could significantly impact the financial stability of power distribution utilities.
It is important to recognize that system loss is not unique to any distribution utility but is a common operational aspect of the delivery of electricity — which affects the entire power industry.
Ronnie Aperocho, Executive Vice President and COO, Meralco
During his fifth State of the Nation Address (SONA), Marcos highlighted the need to stop passing system loss charges and the accompanying value-added tax (VAT) onto consumers.
He has urged lawmakers to amend Republic Act No. 9136, known as the Electric Power Industry Reform Act (EPIRA).
The system loss charge pertains to electricity lost in transmission and distribution, attributed to technical issues and illegal activities such as electricity theft.
Aperocho indicated that the company actively participates in discussions concerning EPIRA amendments and looks forward to constructive dialogues that consider the impact of reforms.
He stressed that any reforms should enhance the operational efficiency of distribution utilities, allowing them to invest in infrastructure and maintain reliable electricity services.
Meralco reports that it has successfully kept its system loss below the 6.5% threshold set by the Energy Regulatory Commission (ERC) through ongoing investments in modernization and efficiency.
Aperocho reaffirmed Meralco's commitment to collaborating with government authorities, regulators, and industry stakeholders to advocate for reforms that protect consumers and strengthen the electricity sector.