The Energy Regulatory Commission (ERC) on Monday clarified that Negros Electric and Power Corp. (NEPC) was operating well within its allowable system loss cap after it was wrongly identified as noncompliant with the cap for private distribution utilities (DUs).

In a statement, the ERC acknowledged that Negros Power was only recently granted its franchise in 2024 after taking over the distribution system previously owned and operated by a rural electric cooperative, which had an applicable system loss cap of 8.5 percent.

This was in line with Negros Power’s legislative franchise under Republic Act No. 12011, which granted it a five-year transition period from the grant of its certificate of public convenience and necessity to achieve the 5.5-percent cap applicable to private utilities, the ERC added.

“Against this interim cap, NEPC’s reported 2025 feeder loss of 7.5% is within, not in excess of, its applicable cap,” the commission said.

The clarification came after the ERC made a presentation during last week’s Senate Committee on Energy hearing that listed Negros Power among the DUs that exceeded their feeder loss cap in 2025, with a feeder loss of 7.5 percent.

The hearing was held in relation to measures seeking to scrap the system loss charge in monthly electric bills, in line with President Ferdinand Marcos Jr.’s directive to Congress during his fifth State of the Nation Address last July.

System losses refer to electricity generated but lost before it reaches consumers, with the cost currently recovered through a charge on power bills.

The ERC sets an allowable cap of 5.5 percent for private DUs and between 8.25 percent and 12 percent for rural electric cooperatives.