During his fifth State of the Nation Address (SONA),
President Ferdinand Marcos Jr. made a resounding call for the removal of
systems loss charges from electricity bills.
The Partners for Affordable and Reliable Energy (PARE)
commends this effort to reduce power rates — a move that will undoubtedly face
opposition from parts of the power industry.
July 28, 2026, Makati City – During his fifth State of the
Nation Address (SONA), President Ferdinand Marcos Jr. made a resounding call
for the removal of systems loss charges from electricity bills.
The Partners for Affordable and Reliable Energy (PARE)
commends this effort to reduce power rates — a move that will undoubtedly face
opposition from parts of the power industry.
However, the consumer advocacy group believes the
President's remarks have also shone a spotlight on an even bigger injustice:
the deeply unfair, two-tiered system that continues to penalize millions of
consumers served by electric cooperatives.
Under the current setup, consumers are forced to shoulder
the inefficiencies of power distributors, but the financial burden is
distributed unequally. There is a glaring double standard in how these
inefficiencies are treated under existing regulations:
Private Distribution Utilities (DUs): Capped at 5.5%
Electric Cooperatives (ECs): Allowed recoverable system loss
caps of up to 12.25%
PARE highlights the irony of this disparity.
Consumers in highly urbanized areas such as Metro Manila,
Cebu, and Davao — served primarily by private distribution utilities — pay
significantly lower systems loss charges.
Meanwhile, consumers in the rest of the country, who are
predominantly served by electric cooperatives, pay more than double. Electric
cooperatives provide electricity service to around 70 million Filipinos,
meaning the majority of electricity consumers are subjected to this unequal
treatment. Worse, actual system losses among many cooperatives currently
average between 11 and 12 percent, with extreme cases reaching a staggering 37
percent.
If it is unjust for a private utility to pass on a 5.5
percent systems loss to its consumers, PARE argues that it is even more unjust
that electric cooperatives are legally permitted to pass on more than double
that amount.
"The President hit the nail on the head during the SONA
— we should not pay for losses we did not create," said Nic Satur Jr.,
Chief Advocate Officer of PARE. "But the current system allows electric
cooperatives to pass on inefficiencies that consumers have no control over.
Consumers connected to electric cooperatives are paying for double, triple, or
even six times the inefficiencies shouldered by consumers served by private
utilities. That is fundamentally unfair."
As a practical and immediate reform, PARE is calling on
Congress to establish a uniform 5 percent recoverable system loss cap for every
distribution utility and electric cooperative in the country, with no
exceptions and no extended timelines for compliance.
"Filipino consumers already pay electricity rates that
rank among the highest in Asia. We are entitled to nothing less than the
international efficiency standard of 5 percent in return," Satur
emphasized. "
You cannot charge world-class prices while expecting
consumers to absorb excessive system losses.
The President's speech made it clear that the status quo is
no longer acceptable."
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About
Partners for Affordable & Reliable Energy
Partners for Affordable and Reliable Energy (PARE) is a
national, independent consumer coalition advocating for affordable electricity,
reliable service, energy justice, and meaningful consumer participation in the
Philippine energy sector.
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