ILECO 1 GM says on EPIRA amendment to address System Loss charges
By Manny Regalado Alcalde
Engr. Miguel “Mike” A. Paguntalan Jr., General Manager of the Iloilo Electric Cooperative (ILECO) I, said President Ferdinand “Bongbong” Marcos Jr.’s call to amend the Electric Power Industry Reform Act (EPIRA) to stop passing system loss charges to consumers is possible, but will take time to realize.
System loss refers to the electricity lost during transmission and distribution from power generators to consumers. Under existing laws, particularly EPIRA, these losses are passed on to consumers.
“ILECO I’s average system loss is around 6 to 7 percent, both technical and non-technical, which is well below the 10.5 percent cap set for cooperatives—higher than that of private distributors,” Paguntalan explained. “System loss accounts for only about 6 percent of the total bill.”
Paguntalan downplayed the issue, saying it is “no big deal” compared to other factors driving electricity costs.
In his 5th State of the Nation Address (SONA) last July 27, President Marcos directed the Department of Energy (DOE) to eliminate system loss charges from monthly bills. However, Energy Secretary Sharon Garin clarified in a DOE press conference that the process could take up to a year, beginning with amendments to the EPIRA law.
Paguntalan stressed that system loss occurs across all stages—generation, transmission, and distribution—and is not directly controlled by cooperatives. “Distribution utilities, especially electric cooperatives, simply purchase power from generators. By law, we are allowed to pass these losses on to consumers,” he said.
He added that higher generation and transmission charges, coupled with tight power supply in the Visayas grid, are the primary reasons for rising electricity costs.
Monthly power rates fluctuate depending on market conditions and are subject to review by the Energy Regulatory Commission (ERC), which may order refunds or additional charges.
Asked about the outlook for ILECO I’s rates in the third quarter of 2026, Paguntalan hinted at a possible decrease in the next billing cycle.
