This is true as the electric motor (actually, two electric motors) in the Prius are required for the transmission to function. The Prius tranmission is essentially a single gear system. In high gear, it simply tranmsits the engine power mechanically. However, In order to get torque for "low gearing", it must convert some of the engine's mechanical power into electrical, with one motor acting as a generator powering the other. This must happen even if there is no flow of power into or out of the battery. This is also the reasno why the Toyota Hybrid System won't work for off-road driving, where slippy conditons can damage the motors, a true mechanical tranmission would be needed.

That's not to say the Toyota Hybrid System isn't without its advantages, it has plenty, including reliability advantages and huge efficiency advantages in city driving conditions.