Following President Ferdinand Marcos Jr.’s fifth State of the Nation Address (SONA), where he issued a decisive call to eliminate systems loss charges from electricity bills, the consumer advocacy group Partners for Affordable and Reliable Energy (PARE) has expressed its full support for the initiative. PARE views this as a critical step toward providing relief to Filipinos burdened by some of the highest electricity rates in Asia.
While commending the President’s commitment to lowering power costs, PARE is urging the government to go further by addressing a deep-seated systemic injustice: the discriminatory two-tiered regulation that forces consumers served by electric cooperatives (ECs) to shoulder significantly higher inefficiencies than those served by private distribution utilities (DUs).
Under existing energy regulations, a stark disparity exists in how “recoverable” systems loss—the electricity lost during transmission and distribution—is passed on to consumers:
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Private Distribution Utilities (DUs): Capped at 5.5%.
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Electric Cooperatives (ECs): Allowed recoverable system loss caps of up to 12.25%.
This regulation disproportionately affects the vast majority of the population. While consumers in major urban centers like Metro Manila, Cebu, and Davao benefit from the lower 5.5% cap, the approximately 70 million Filipinos served by electric cooperatives face higher charges. In many instances, actual system losses in these cooperatives range from 11% to 12%, with extreme cases reaching as high as 37%.
“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.”
PARE argues that if it is considered unjust for a private utility to pass on a 5.5% systems loss, it is inherently more unjust for electric cooperatives to pass on more than double that amount.
To rectify this imbalance, PARE is formally calling on the Congress to implement an immediate policy shift:
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Establish a uniform 5% recoverable system loss cap for every distribution utility and electric cooperative across the nation.
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Eliminate all exceptions and remove extended timelines for compliance.
“Filipino consumers are entitled to nothing less than the international efficiency standard of 5%,” 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.”
PARE remains committed to working with lawmakers to ensure that this reform is enacted, providing immediate and equitable financial relief to millions of Filipino households.
