DOE Launches Four-Stage Plan To Remove Electricity Theft Costs From Power Bills
- August 26, 2026
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The Department of Energy (DOE) is rolling out a phased program to eliminate nontechnical system losses among electric cooperatives, targeting electricity theft, illegal connections and billing inefficiencies that add to the cost of power for paying consumers.
Energy Secretary Sharon Garin said Monday the government aims to reduce nontechnical losses in four stages, starting with a 25-percent reduction and progressing to 50 percent, 75 percent and eventually 100 percent.
“Consumers should not be made to shoulder costs arising from electricity that is illegally taken or improperly accounted for. Nor should consumers pay for costs due to inefficiencies of their electric cooperatives,” Garin said.
The initiative follows President Ferdinand Marcos Jr.’s call in his recent State of the Nation Address to remove system loss charges from electricity bills amid elevated power prices.
Funding Challenge
The DOE estimates that more than ₱7.5 billion will be needed to implement the program for electric cooperatives. The government is considering national government funds and loans as possible sources, with the final funding arrangements still being worked out with the Department of Budget and Management and other officials.
Under the proposed four-stage funding structure, ₱4 billion would support the initial effort to cut nontechnical losses by 25 percent. Another ₱1 billion would be allotted for each of the 50-percent and 75-percent reduction stages, while ₱1.5 billion would fund the final stage aimed at eliminating the remaining nontechnical losses.
The National Electrification Administration (NEA) had earlier proposed beginning the gradual removal of nontechnical system loss charges in January 2027, alongside loans to help electric cooperatives absorb the costs of reducing the losses.
Garin said the DOE’s initial estimate is that the gradual removal could take about a year, while officials are still finalizing the financing mechanism.
Focus On Theft And Collections
Nontechnical system losses largely result from electricity theft, illegal connections, tampered meters, and weak billing and collection systems. Unlike technical losses, which occur naturally as electricity moves through distribution infrastructure, these losses can be addressed through enforcement and administrative measures.
DOE Undersecretary Rowena Cristina Guevara said electric cooperatives currently have an average system loss rate of 10.45 percent, with nontechnical losses accounting for roughly 3 percent to 4 percent.
The agency expects that eliminating nontechnical losses could lower monthly electricity bills by about 3 percent to 4 percent for electric cooperative customers. Customers of private distribution utilities could see reductions of around 1 percent to 1.5 percent.
Guevara said the program will prioritize anti-pilferage enforcement, consumer education, billing and collection efficiency, meter management and audits, consumer database cleansing, institutional strengthening, and policy and regulatory reforms.
The DOE also launched “Brigada Kontra Jumper,” a campaign intended to strengthen government and utility efforts against illegal connections.
Guevara said households that allow illegal “jumper” connections should understand that these arrangements effectively shift costs to other consumers.
“There are areas where not everyone pays because collections are weak. So we will strengthen that,” she said.
The government is also encouraging consumers to report suspected electricity theft, tampered meter seals, illegal connections, and electrical safety hazards through the eGovPH mobile platform.
Technical Losses To Follow
While nontechnical losses are being prioritized because they can be addressed more quickly, the DOE acknowledged that technical losses will require longer-term infrastructure improvements.
Guevara said technical losses account for more than 6 percent of electricity distributed by electric cooperatives and represent a larger portion of total losses than nontechnical losses.
These cannot be completely eliminated because some electricity is naturally lost through resistance and other physical processes in power distribution.
The DOE, NEA, Energy Regulatory Commission, and electric cooperatives will prepare distribution development plans to improve network efficiency and reduce technical losses.
The plans will examine the routing and capacity of sub-transmission lines and primary feeders, as well as the location and capacity of substations, secondary lines and capacitors.
Electric cooperatives are expected to submit their optimal distribution development plans through the NEA to the ERC by July 2027, following completion of the plans in the first half of that year.
Guevara said the government expects to cut nontechnical losses by 50 percent by the time Marcos delivers his next SONA in July 2027.
Technical improvements, however, will take longer. Officials estimate that two to three additional years will be needed to minimize technical system losses.
The DOE is coordinating with the NEA, ERC, Philippine National Police, Department of the Interior and Local Government, local governments, and utilities to strengthen enforcement and implementation of the broader system loss reduction plan.
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