Pangilinan has issued a stark warning that the Philippine power industry could face existential risk if regulators force distributors to absorb system losses rather than passing them on to consumers.
The comments come in response to President Ferdinand Marcos Jr.'s directive to remove system loss charges from electricity bills, a move intended to lower costs for households and businesses but one that threatens the financial viability of distribution utilities.
Pangilinan argued that system losses, which account for a significant portion of grid inefficiencies, represent a substantial cost burden that cannot simply be erased without severe consequences for the sector's stability.
If distributors are compelled to cover these losses internally, the resulting margin compression could undermine their ability to maintain infrastructure, invest in grid modernization, and service existing debt.
The warning underscores the tension between political objectives to reduce consumer prices and the economic realities of operating an aging power grid.
The Philippine power sector has long grappled with high system losses, driven by technical inefficiencies and non-technical factors such as theft and metering errors.