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Brix Lelis - The Philippine Star
August 21, 2026 | 12:00am
The Meralco executive said the utility has kept its system loss at around five percent, well below the 6.5 percent cap set by the Energy Regulatory Commission.
STAR / Jesse Bustos
MANILA, Philippines — Power giant Manila Electric Co. has one of the country’s lowest system loss rates, helping keep electricity costs in check across its franchise area, according to Meralco senior vice president Arnel Casanova.
The Meralco executive said the utility has kept its system loss at around five percent, well below the 6.5 percent cap set by the Energy Regulatory Commission.
Casanova said electric cooperatives in other parts of the country could achieve similar efficiency by partnering with Meralco.
“If Meralco comes in, the double-digit system losses of electric cooperatives will be dropping to single digits,” he told “Money Talks” on One News yesterday, noting that the partnership could help bring down power rates.
System loss refers to electricity lost before it reaches consumers, with the cost currently recovered through a line item on power bills.
It is classified into technical losses, caused by the natural dissipation of electricity as it travels through transmission and distribution lines, and non-technical losses, which arise from pilferage and illegal connections.
Currently, system losses at some electric cooperatives reach more than 20 percent.
“If you are able to lower that to even a single digit, that’s worth billions of pesos in savings for consumers themselves. So, you get reliable power, an efficient electric utility and cheaper power,” Casanova said.
As part of its expansion strategy, Meralco is pursuing strategic partnerships with electric cooperatives, offering capital and expertise to help strengthen their distribution networks.
Under the proposed arrangement, Meralco would come in as an investor and hold a controlling stake on the board.
Casanova stressed that the plan does not involve a takeover. Instead, the cooperatives would be converted into stock corporations, with their member-consumer-owners becoming shareholders.
“Unlike other competitors, they really take over the electric cooperatives because they take away the franchise, they take away the assets, and they even terminate the employees. In this case, for Meralco, we actually allow the electric cooperatives to stay as they are,” he noted.
Under the Electric Power Industry Reform Act (EPIRA), electric cooperatives have the option to convert into stock corporations.
“The challenge among electric cooperatives is capital and technology. So, we want to infuse capital and share technological capabilities with electric cooperatives around the Philippines so that they can provide reliable and affordable power,” Casanova said.
Meanwhile, during the joint Senate energy and public services committee hearing on removing system loss from the bill, Senate President Sherwin Gatchalian said the “non-technical” system loss due to pilferage can still be removed by making the distribution utilities (DUs) take in the losses by counting it as “cost” instead of “revenue.”
It should be incumbent on the DUs to be accountable enough to absorb their nontechnical system loss, and invest in their infrastructure and equipment to prevent electricity theft and illegal “jumpers.”
Senate energy committee chair Erwin Tulfo agreed, saying the DUs have taken advantage of EPIRA in passing on the system loss charge to consumers while not upgrading their equipment.
For his part, Energy Regulatory Commission president Francis Juan said the ERC is studying the proposals to comply with President Marcos’ State of the Nation Address call for Congress to remove system loss from the bill. – Marc Jayson Cayabyab
