CONSUMER group Cebu Electricity Rights Advocates (Cera) is urging the Energy Regulatory Commission (ERC) to adopt a uniform 5.5 percent system loss cap for all power distributors, saying the current policy results in higher electricity charges for consumers served by electric cooperatives.
The consumer advocacy group said private distribution utilities such as Visayan Electric and Mactan Electric Co. are allowed to recover up to 5.5 percent of system losses from consumers, while electric cooperatives, including Cebeco I, II and III, may recover up to 12.5 percent.
System loss refers to electricity lost during transmission and distribution because of technical factors such as heat dissipation in power lines, as well as non-technical causes including electricity theft and illegal connections.
Cera said its analysis of estimated January 2026 billing showed that a household consuming 200 kilowatt-hours (kWh) would pay a maximum system loss charge of about P140 under a private distribution utility, compared with about P280 under an electric cooperative because of the higher allowable cap.
The group said the disparity places a heavier financial burden on consumers in
cooperative franchise areas while failing to encourage investments that could reduce actual system losses.
“We found that one primary reason for the increasing electricity rates among electric cooperatives is their high system loss cap. These losses are then transferred to consumers,” Cera convenor Nathaniel Chua said.
Cera also argued that the current policy weakens the financial position of electric cooperatives. While cooperatives may recover up to the 12.5 percent cap from consumers, losses beyond the threshold must be absorbed by the utility, reducing funds available for system upgrades, maintenance and personnel.
According to Chua, this creates a cycle in which aging infrastructure contributes to higher technical losses, leaving cooperatives with fewer resources to modernize their networks.
The group’s proposal comes after President Ferdinand R. Marcos Jr. said in his State of the Nation Address that the government was studying the possibility of eliminating system loss charges passed on to consumers.
Cera said removing system loss charges entirely may face opposition from the power sector and delay consumer relief. Instead, it urged regulators to standardize the allowable system loss cap at 5.5 percent for both private distribution utilities and electric cooperatives, saying the measure would be easier to implement while encouraging network modernization and lowering electricity costs for consumers. / KOC