Manila: Removing electricity-theft losses from consumers' bills would trim utility earnings but would not drive power distributors into bankruptcy, the Energy Regulatory Commission (ERC) said Thursday. During a Senate Committee on Energy hearing, ERC Chairperson and Chief Executive Officer Francis Saturnino Juan emphasized that non-technical system losses account for only about 1 percent to 1.5 percent of a utility's total system loss. 'It would represent a reduction in their income, but it is small compared with the total system loss,' Juan said.
According to Philippines News Agency, panel chair Senator Erwin Tulfo questioned whether the proposed removal of charges arising from electricity pilferage, illegal connections, and meter tampering could destabilize the power industry. Juan responded that utilities would need to adapt to the new regulations and enhance their efforts to combat electricity theft to mitigate the financial impact. 'Maaaring mas magiging masigasig sila sa panghuhuli ng mga nagnanakaw ng kuryente (They may become more aggressive in catching those stealing electricity),' he mentioned.
Department of Energy Undersecretary Riolita Inocencio concurred, suggesting that lowering the allowable system-loss cap could serve as a self-regulating mechanism, pushing distribution utilities and electric cooperatives toward greater efficiency. She noted that eliminating non-technical losses could be achieved sooner, whereas reducing unavoidable technical losses would necessitate long-term infrastructure improvements, particularly for electric cooperatives.
Meralco representative Jose Ronald Valles, however, cautioned that eliminating non-technical losses entirely could require additional personnel, equipment, and capital expenditures to monitor illegal connections continuously. Valles reported that Meralco's system loss stood at 4.22 percent in 2025, below the ERC's 5.5-percent cap, with less than 1 percent attributed to non-technical losses. He argued that the cost of completely eradicating power theft could surpass the savings consumers would gain from removing the charge, with reasonable operating and capital expenses still subject to ERC evaluation for possible inclusion in tariffs.
Tulfo rejected the notion that such costs should be passed back to customers, asserting that businesses must be prepared to absorb operational risks and losses. 'Problema ninyo iyon. That is your business. Hindi kami part ng Meralco. Kami po ang mga consumer (That is your problem. That is your business. We are not part of Meralco. We are consumers),' he stated.
Valles clarified that utilities already absorb system losses exceeding the regulatory cap and that amounts recovered from electricity pilferage cases are returned to customers through reductions in generation charges. He also explained that residential customers are charged the same system-loss rate per kilowatt-hour, but the final amount varies according to each household's electricity consumption.
