A consumer advocacy group in Davao has expressed support for President Ferdinand R. Marcos Jr.‘s proposal to remove the system loss charge from electricity bills but stressed that meaningful reductions in electricity costs will require broader reforms to the country’s power billing system.
In a statement, the Davao Consumer Movement (DCM) said eliminating the system loss charge could provide immediate relief to consumers but warned that the move alone may not necessarily result in lower monthly electricity bills if the cost is simply transferred to other bill components.
“We support every effort to reduce electricity costs and ease the burden on consumers. However, reforms should be carefully studied to ensure they provide genuine and lasting relief rather than simply shifting costs from one part of the electric bill to another,” the group said.
Ryan Amper, DCM consumer advocate and convenor, explained that the system loss charge is intended to recover the cost of electricity that has already been purchased but is lost during transmission and distribution, rather than serving as a source of profit for distribution utilities.
He said removing the charge without corresponding policy and regulatory reforms leaves uncertainty over how distribution utilities will recover these legitimate expenses.
“Without corresponding policy and regulatory changes, simply removing the system loss charge raises the question of how these legitimate costs will eventually be recovered. There is a possibility that these costs may later be reflected in another recoverable component of the electric bill, defeating the purpose of removing the charge in the first place,” Amper said.
DCM urged the government to conduct a comprehensive review of electricity charges imposed under the Electric Power Industry Reform Act (EPIRA), saying reforms should not be limited to a single billing item.
Among the issues raised by the group is the difference in allowable system loss recovery between private distribution utilities and electric cooperatives. Private utilities are allowed to recover up to five percent of system losses, while electric cooperatives may recover as much as 12.5 percent, resulting in higher charges for consumers served by cooperatives.
Based on June 2026 billing data, DCM said customers of Davao Light and Power Company paid approximately P0.6322 per kilowatt-hour in system loss charges, while consumers served by Northern Davao Electric Cooperative, Inc. (NORDECO) paid about P1.4025 per kilowatt-hour.
For a household consuming 250 kilowatt-hours monthly, the system loss charge amounts to around P158.05 under Davao Light, compared with P350.62 under NORDECO, the group noted.
Amper said the government should gradually reduce the allowable system loss recovery for electric cooperatives while supporting initiatives to improve the efficiency of their distribution networks.
He also called for a review of other charges collected from consumers, including the Lifeline Subsidy, Green Energy Auction Allowance (GEA-All), Feed-in Tariff Allowance (FIT-All), and the 12-percent value-added tax (VAT) imposed on several components of electricity bills.
“The government should conduct a comprehensive review of existing electricity charges under the Electric Power Industry Reform Act of 2001 and other related policies to determine which costs should continue to be passed on to consumers,” Amper said.
He added that reducing or removing the VAT on major electricity charges could provide immediate savings for consumers while the government pursues longer-term reforms in the power sector.
DCM maintained that sustainable solutions should focus on reducing the overall cost of electricity instead of eliminating a single charge that could later be recovered through other mechanisms, emphasizing the need for transparent, equitable, and lasting reforms that genuinely benefit consumers.
