Negros Electric and Power Corp. (NEPC) remains compliant with its allowable system loss ceiling, clearing the company of an earlier regulatory finding that it breached the limit in 2025.

The Energy Regulatory Commission (ERC) on Monday clarified that Negros Power’s 7.5-percent feeder loss last year was within the applicable cap as the company remains under a five-year transition period.

The clarification came after the ERC listed Negros Power among distribution utilities that exceeded their feeder loss caps during a Senate committee on energy hearing last week.

The regulator said Negros Power was granted its franchise only 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.

Under Republic Act No. 12011, Negros Power was given five years from the grant of its certificate of public convenience and necessity to bring its system losses down to the 5.5-percent ceiling imposed on private distribution utilities.

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

The clarification effectively removes Negros Power from the earlier finding that it had breached its allowable feeder loss ceiling.

The issue surfaced as lawmakers scrutinize system loss charges following President Ferdinand Marcos Jr.’s directive to Congress during his fifth State of the Nation Address in July to scrap the charge from consumers’ monthly electricity bills.

System loss refers 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 system loss cap of 5.5 percent for private distribution utilities and between 8.25 percent and 12 percent for rural electric cooperatives.

Negros Power, however, remains covered by the transition period under its franchise as it works toward meeting the lower cap imposed on private utilities.