Meralco: Some system loss unavoidable, urges careful EPIRA reform

'System loss is not unique to any distribution utility but is a common operational aspect of the delivery of electricity,' Meralco says in a statement, adding that its system loss rate was 'well below' the 6.5% cap set by regulators MANILA, Philippines – Some system loss is unavoidable when delivering electricity, Manila Electric Company (Meralco) said, as it urged lawmakers to consider the operational and financial impact of President Ferdinand Marcos Jr.’s proposal to remove the charge from consumers’ power bills. Meralco said it respected the President’s policy direction but stressed that a certain level of technical loss is “inherent in operating an electric distribution system.” “While distribution utilities like Meralco continue to invest in modernizing and upgrading facilities and deploying technologies that reduce system losses, a certain level of technical losses remains inherent in operating an electric distribution system,” Meralco executive vice president and chief operating officer Ronnie Aperocho said on Tuesday, July 28. System loss refers to the difference between the electricity entering a distribution network and the amount eventually recorded and billed to customers. There are two parts to system loss: technical losses which occur as electricity travels through wires, transformers, and other equipment, and nontechnical losses, which may come from electricity theft, illegal connections, and metering problems. Overall, system loss charges account for about 5% of an average Meralco electricity bill. Marcos has argued that consumers should not have to pay for electricity that does not reach them. He called on lawmakers to immediately amend the Electric Power Industry Reform Act (EPIRA), the 25-year-old law governing the power industry, to prohibit passing system loss charges and the corresponding value-added tax on to consumers. Meralco, who would be directly affected by any change, stressed that system loss is not unique to the company but is “a common operational aspect of the delivery of electricity” across the power industry. (READ: Why your Meralco bill will be higher in July – and might rise again soon) As of end Q1 2026, the distribution utility had a system loss rate of 5.72%, which it described as “well below” the 6.5% cap set by the Energy Regulatory Commission. Meralco attributed this to investments in network modernization, upgraded facilities, new technologies, and other system loss management initiatives. The company also said reforms to the EPIRA should protect consumers without weakening the ability of distribution utilities and electric cooperatives to maintain their networks, invest in resilience, and provide stable electricity service. “We look forward to productive discussions which we hope will carefully consider the impact of reforms on the operations and sustainability of distribution utilities,” Aperocho said. In 2025, Meralco recorded P497.3 billion in consolidated revenue and an all-time high P50.6 billion in consolidated core net income, while spending P108.9 billion on capital projects. – Rappler.com How does this make you feel? Loading