Palace pushes balanced power rate reform

The Marcos administration is pursuing a balanced and consultative approach to its proposal to remove systems loss charges from electricity bills, stressing that any reform will protect consumers without undermining the stability of the country’s power industry.

At a Palace briefing on Thursday, Palace Press Officer Claire Castro said the government welcomes the willingness of power sector stakeholders to discuss the proposal, describing it as a positive step toward crafting reforms that would benefit electricity consumers while taking into account the concerns of utility companies and investors.

Castro said extensive studies and consultations are underway because the proposed changes could affect various segments of the power industry. She noted that the Department of Energy (DOE), under Energy Secretary Sharon Garin, is reviewing existing regulations, relevant legislation and Energy Regulatory Commission (ERC) policies while engaging stakeholders to ensure that any amendments are carefully designed.

According to Castro, the administration’s primary objective is to bring down electricity rates, but emphasized that the government also wants to preserve the financial viability of power distributors, investors and other industry players.

She likewise assured rural electric cooperatives and other stakeholders that their concerns would be considered during the consultation process, including requests for possible government assistance should the proposal be implemented.

The Palace’s statement came after Meralco Chairman and Chief Executive Officer Manny V. Pangilinan acknowledged that removing systems loss charges would have far-reaching implications for electricity generation, transmission and distribution companies, making industry-wide discussions essential.

President Ferdinand R. Marcos Jr. raised the proposal during his fifth State of the Nation Address (SONA), calling for immediate amendments to the Electric Power Industry Reform Act (EPIRA) so that consumers would no longer shoulder systems loss charges in their monthly electricity bills.

Under current ERC regulations, distribution utilities and electric cooperatives are allowed to recover a portion of technical and non-technical systems losses through power rates, subject to prescribed regulatory limits.