LATEST COMMENTARY
FIVE THINGS TO KNOW
MCT READER PULSE · MCT-PULSE-2026-017
MCT READER SURVEY
Gaano ka nagtitiwala na tama ang ginagawa ng Kongreso sa budget ng bayan?
This is an informal survey of people who choose to participate. It is not a scientific or nationally representative sample.
ABOUT THE PROPOSED CHANGES TO SYSTEM-LOSS CHARGES
What the House committee decision establishes, how system loss is charged, and why households still need a final rule and a sample bill before calculating savings.
If you have ever looked at the system-loss line on an electricity bill and wondered why you were paying for power you did not use, Monday’s House energy committee decision deserves a closer look. The panel approved a substitute bill and committee report seeking changes to how those costs are borne by consumers.
The proposal concerns an expense that households already encounter. Understanding it requires separating the electricity lost in a network, the amount a utility is allowed to recover, and the legal steps needed to change the charge. Here are five things to understand before expecting a smaller bill.
1
COMMITTEE APPROVAL DOES NOT CHANGE TODAY’S BILL
The House Committee on Energy has advanced the proposal. That is the stage established by its October 12 announcement. It is not an announcement that a new law has taken effect or that a utility must immediately erase a line from your bill.
The Constitution requires proposed legislation to go through the lawmaking process. Further action in Congress, the final wording and the requirements for a law to take effect remain relevant. A headline about committee approval should identify that stage clearly.
For a household budgeting this month’s payment, the safe approach is to use the bill actually issued and check the utility’s applicable rules. The announcement gives consumers a measure to follow and questions to ask. It does not establish an immediate discount they can calculate or a payment they can withhold.
WHAT TO WATCH
The substitute bill’s published text and the next recorded plenary action. These will show whether the proposal progresses and whether its coverage changes before consumers can rely on it.
2
SYSTEM LOSS HAS BOTH TECHNICAL AND NON-TECHNICAL CAUSES
Electricity can be lost as it passes through wires, transformers and other distribution equipment. Meralco’s explanation identifies heat generated in wires and the passage of power through transformers as technical causes. Electricity theft and illegal connections are examples of non-technical losses.
Those causes require different responses. A discussion about improving equipment needs engineering evidence. A discussion about illegal connections needs reliable detection and enforcement. Calling all system loss theft obscures the part associated with delivering electricity through a physical network.
For readers, this is a way to question a proposal more precisely. Ask which losses it addresses, how those losses are measured and what changes the operator would have to make. A rule about who pays can change the financial responsibility; reducing the actual loss also requires attention to its cause.
WHAT TO WATCH
The bill’s definitions of covered losses and the regulator’s technical assessment. These can reveal whether the proposed rule distinguishes the causes accurately and can be implemented using measurable records.
3
THERE IS ALREADY A LIMIT ON WHAT UTILITIES MAY PASS ON
Meralco’s billing explanation says the Energy Regulatory Commission sets a maximum recoverable level. Losses beyond that level cannot be passed on to customers and must be shouldered by the distribution utility. The proposal therefore needs to be compared with the existing rules, rather than discussed as though every loss is currently recoverable without limit.
A consumer can ask for the basis of the charge appearing on the bill. The useful information includes the applicable rate, how it was calculated and the rule authorizing recovery. Those records help establish what the household is paying for.
If a new law shifts more of the cost to an operator, readers should look for the precise change: which loss stops being recoverable, when that change begins and how compliance is checked. Without those details, a promise of relief is difficult to translate into a household budget.
WHAT TO WATCH
The comparison between the final proposal and existing ERC rules, including the explanation of any transition. Consumers need to know which charge changes and when it changes.
4
THE VAT TREATMENT IS A SEPARATE QUESTION
The ERC has separately directed utilities to show allowable system-loss charges as a distinct government-mandated line item that is not subject to VAT. That addresses the tax treatment of an allowable charge. It does not establish that the underlying system-loss charge has been abolished.
This gives a reader two entries to examine: the system-loss amount and any tax treatment attached to it. Removing a tax from a charge and removing the charge itself would produce different results. Reports and captions should tell readers which change they describe.
A household comparing bills should also check its consumption and the other rates shown. A lower amount in one component can be offset by movement elsewhere. It is useful to follow the particular line being changed before attributing the entire month’s increase or decrease to one reform.
WHAT TO WATCH
Your utility’s billing explanation and the line items on the next issued bill. If the tax treatment is unclear, ask how the applicable ERC direction is reflected, rather than assuming that a system-loss amount should disappear altogether.
5
HOUSEHOLDS NEED AN ACTUAL SAVINGS CALCULATION
The proposal’s stated intention is consumer relief. The final assessment should show the result on an understandable sample bill and explain the assumptions behind it. Readers need to know what is removed, what remains and whether any other component changes.
For illustration, removing a ₱150 line from an otherwise unchanged bill reduces that bill by ₱150. This is a hypothetical example, not a forecast for a household or a claim about the proposal’s final coverage. It shows why the actual line item and final rule are needed before promising a peso amount.
The operator’s responsibilities should also be clear. Consumers can reasonably ask how losses will be measured, how avoidable losses will be reduced and how service reliability will be assessed. The ERC has previously emphasized both consumer protection and the operating conditions of utilities when discussing system-loss reform. Those questions belong in the review of the measure.
WHAT TO WATCH
An official cost-impact assessment, a clearly explained sample bill and the final implementation requirements. These would let consumers judge the proposal through its financial effect and the service they receive.
BOTTOM LINE
There is now a new committee decision to follow, while existing billing rules still need to be understood. Consumers deserve a clear account of the losses being charged, the limits on recovery and the effect of any proposed change. Before calling the measure a saving for every household, show the final rule and its calculation on a bill people can read.
GOOGLE PREFERRED SOURCES
FOLLOW MCT ON GOOGLE
Google’s Preferred Sources feature lets you choose publications you want Google to prioritize for you. Select “Add to Preferred Sources” to make MCT easier to find in Top Stories and other eligible Google results. This does not subscribe you to email.
SUPPORT MCT
HELP KEEP INDEPENDENT POLITICAL WRITING GOING.
Morning Coffee Thoughts is reader-supported. Contributions help pay for research tools, hosting, and the work required to verify and explain each development.