Manila Electric Company (Meralco) stated on Tuesday, July 28 that some system loss is unavoidable in electricity delivery, responding to President Ferdinand Marcos Jr.'s proposal to remove system loss charges from consumer power bills. The company's Chief Operating Officer Ronnie Aperocho said technical losses remain inherent in operating electric distribution systems despite ongoing investments in modernization. President Marcos has called for immediate amendments to the Electric Power Industry Reform Act (EPIRA) to prohibit passing system loss charges and related value-added tax to consumers, arguing that customers should not pay for electricity that does not reach them.
Meralco Explains Technical and Nontechnical System Loss Components
System loss refers to the difference between electricity entering a distribution network and the amount recorded and billed to customers. The company categorized system loss into two parts: technical losses occurring as electricity travels through wires, transformers, and other equipment, and nontechnical losses stemming from electricity theft, illegal connections, and metering problems. System loss charges account for approximately 5% of an average Meralco electricity bill.
Meralco emphasized in a statement that "system loss is not unique to any distribution utility but is a common operational aspect of the delivery of electricity" across the power industry. The company said it respects the President's policy direction while stressing that technical loss is inherent in system operations.
Meralco Reports 5.72% System Loss Rate Below Regulatory Cap
As of end Q1 2026, Meralco's system loss rate stood at 5.72%, which the distribution utility described as "well below" the 6.5% cap set by the Energy Regulatory Commission. The company attributed this performance to investments in network modernization, upgraded facilities, new technologies, and system loss management initiatives.
In 2025, Meralco recorded P497.3 billion in consolidated revenue and P50.6 billion in consolidated core net income, while spending P108.9 billion on capital projects.
Meralco Calls for EPIRA Reforms Balancing Consumer Protection and Utility Sustainability
Aperocho stated that reforms to the EPIRA should protect consumers without weakening the ability of distribution utilities and electric cooperatives to maintain their networks, invest in resilience, and provide stable electricity service. "We look forward to productive discussions which we hope will carefully consider the impact of reforms on the operations and sustainability of distribution utilities," Aperocho said.
The company stressed that "while distribution utilities like Meralco continue to invest in modernizing and upgrading facilities and deploying technologies that reduce system losses, a certain level of technical losses remains inherent in operating an electric distribution system."
FAQ
What did Meralco say about system loss charges on Tuesday, July 28?
Meralco stated that some system loss is unavoidable in electricity delivery and that technical losses remain inherent in operating electric distribution systems despite ongoing modernization investments. The company's COO Ronnie Aperocho made this statement in response to President Marcos Jr.'s proposal to remove system loss charges from consumer bills.
What is Meralco's current system loss rate?
As of end Q1 2026, Meralco's system loss rate was 5.72%, which is below the 6.5% cap set by the Energy Regulatory Commission. The company attributed this performance to investments in network modernization, upgraded facilities, new technologies, and system loss management initiatives.
