DOE forms task force to implement Marcos' order to remove system loss charges

The Department of Energy (DOE) has formed a joint task force to establish the technical, regulatory, and legislative framework to implement President Ferdinand “Bongbong “ Marcos Jr.'s directive to remove system loss charges and their accompanying value-added tax (VAT) from consumers' electricity bills.

In a statement on Thursday, the DOE said the joint task force – which will include the Energy Regulatory Commission (ERC), the National Electrification Administration (NEA), and electric cooperatives – will serve as a coordinating body for the comprehensive review of the proposed reforms in the energy sector.

"The Department of Energy (DOE) has established a Joint Task Force... to lead the next phase of implementing President Ferdinand R. Marcos Jr.'s directive to remove system loss charge and the corresponding Value-Added Tax (VAT) from consumers' electricity bills," the DOE said.

"The Joint Task Force will coordinate the technical, regulatory, and legislative work needed to advance the Administration's commitment to fairer electricity rates, stronger consumer protection, and a more efficient power sector," it added.

The Energy Department said the task force’s main objective is to ensure technical collaboration and inclusive stakeholder participation as legislative and regulatory measures are developed.

In his fifth State of the Nation Address (SONA 2026), Marcos called on Congress to amend the Electric Power Industry Reform Act (EPIRA) and put a stop to system loss charges, including its accompanying VAT, from being passed on to consumers.

With this development, the DOE-ERC-NEA-electric coops task force will pursue “reforms that protect consumer interests, improve operational efficiencies, and strengthen the long-term reliability of the Philippine power sector.”

The DOE said it convened the ERC and the Manila Electric Company (Meralco) on July 28 to advance the policy, regulatory, and legislative measures needed to deliver fairer electricity bills.

"During the consultation, Meralco also expressed its commitment to exploring operational adjustments aimed at lowering electricity prices for its customers in the coming months, aligning with the collective goal of easing the financial burden on households and businesses," the DOE said in a separate statement.

"As the country's largest private distribution utility serving millions of customers, Meralco's role is essential in identifying practical and workable approaches that support the administration's consumer-first agenda."

Meralco chairman Manuel V. Pangilinan earlier raised concern about who should shoulder the cost of system loss charges if these are removed from the bills of electricity consumers.

Meralco executive vice president and chief operating officer Ronnie Aperocho likewise said that while the company respects Marcos’ policy direction, “it is important to recognize that system loss is not unique to any distribution utility but is a common operational aspect of the delivery of electricity — which affects the entire power industry.”

The DOE, nonetheless, said it is engaging other private distribution utilities to ensure that the reforms focus on delivering meaningful savings for consumers and operationally efficient electricity services and identify practical implementation pathways that support the President's consumer-first agenda.

“The DOE recognizes that implementing the President's policy direction will require amendments to existing laws, including provisions of the Electric Power Industry Reform Act (EPIRA) and corresponding regulatory reforms,” it said.

“Through the Joint Task Force, technical recommendations will support both Houses of Congress in crafting legislation that advances a more affordable, reliable, and resilient energy sector,” it added.

Beyond legislative work, the DOE-ERC-NEA-electric coops task force is also advancing complementary measures to reduce system losses at their source through improved operational efficiency, strengthened enforcement against electricity theft, and the modernization of distribution networks.

“The Department expresses its appreciation to the President for his strong call to reform the treatment of system loss charges and the corresponding VAT. The President’s directive has galvanized the entire energy sector, including government agencies, regulators, electric cooperatives, distribution utilities, and industry stakeholders to work with greater urgency in advancing reforms that will deliver fairer electricity bills and improve the reliability of the country's power sector,” the DOE said.

“Guided by this clear policy direction, the Department of Energy will continue working alongside Congress, the ERC, NEA, electric cooperatives, distribution utilities, consumer groups, and other stakeholders to translate this commitment into lasting reforms for the benefit of every Filipino,” it added. –NB/VBL, GMA News