The Energy Regulatory Commission (ERC) said it is prepared to immediately enforce a policy prohibiting the charging of system loss to electricity consumers should Congress approve amendments to the Electric Power Industry Reform Act (EPIRA).

ERC Chairperson Francis Juan made the statement following President Ferdinand Marcos Jr.’s call during his State of the Nation Address (SONA) to remove system loss charges from power bills.

“Kung ito po ay ang ipaguutos ng batas sa pamamagitan ng pag-amyenda at hindi na maaaring masingil yung gastusin na associated doon sa systems loss, ito po ay aming i-implementa nang buong-buo nang naaayon doon sa amyenda,” Juan said during a Committee on Energy hearing on Thursday, July 30.

The proposal, however, has raised concerns within the power sector, particularly on its potential impact on the operations of distribution utilities.

Juan explained that system loss costs are not tied to the core business of electricity distribution but are linked to the procurement of power supply from generation companies, which utilities deliver to consumers.

Under the current regulatory framework, distribution utilities are allowed to recover these costs through a “pass-through” mechanism, enabling them to charge consumers for electricity purchased but not fully delivered due to technical and non-technical losses.

“Ito pong systems loss, ito ay associated hindi doon sa kanyang negosyo ng distribution kundi doon sa pag-procure nya ng generation ng supply at ito naman ang kanyang idine-deliver sa kanyang mga consumers,” Juan said.

He added that some system losses, particularly technical losses, are unavoidable, prompting the need to determine how such costs will be absorbed if consumers are no longer required to shoulder them.

“Kakailanganin lang ng pagdedesisyon kung ano ang magiging mekanismo para ito ay mapaghatian o kaya yung burden ay mapasan hindi ng mga consumers,” he said.

Industry estimates cited potential losses of up to $1 billion (around ₱60 billion) annually for power distributors and generators if system loss charges are removed.

Despite these concerns, the ERC maintained that it will carry out any directive once it is enacted into law.