Lawmakers called for a more objective discussion on system loss charges during a congressional hearing, saying technical losses are an inherent part of electricity distribution and should not automatically be viewed as inefficiency.

Pangasinan 2nd District Rep. Mark Cojuangco said every energy system experiences unavoidable losses, comparing power distribution to an internal combustion engine, where only about 30 percent of fuel energy is converted into useful work while the rest is lost as heat.

"Does that mean a taxi driver should not be allowed to charge for all the gasoline consumed because 70 percent was lost as system loss? It doesn't make sense. We should look at this dispassionately because we might be misleading our people," Cojuangco said.

He added that the public should compare the theoretical maximum efficiency of distribution utilities with their actual performance to determine whether utilities are minimizing technical losses.

Deputy Minority Leader and APEC Party-list Rep. Sergio Dagooc said discussions should also recognize the unique structure of electric cooperatives, which are non-stock, non-profit entities owned by their member-consumers, unlike investor-owned private distribution utilities.

Dagooc warned that removing the system loss charge without adjusting rates could strain electric cooperatives financially, as they may be forced to use funds intended for personnel salaries and network maintenance to absorb the costs.

"If system loss is removed without corresponding adjustments, the funds intended for salaries and maintenance will instead be used to absorb those costs," he said.

Energy Regulatory Commission Chairperson Nino Juan agreed that electric cooperatives could face cash flow constraints because their current rates do not provide allowances to absorb system loss costs.

Dagooc also stressed that distribution utilities do not profit from system loss, explaining that generators bill utilities for the full amount of electricity delivered, including energy lost during transmission and distribution.

He said Republic Act No. 7832 and the Electric Power Industry Reform Act of 2001 (EPIRA) allow utilities to recover allowable system loss costs from consumers because generators charge for the total electricity supplied, not just the amount recorded by consumers' meters.