Manila: A bill filed in the Senate seeks to lower the recoverable system loss charges passed on to consumers to a uniform 1 percent for both private electric utilities and rural electric cooperatives. Sen. Rodante Marcoleta, who filed Senate Bill No. 2131, or the proposed 'System Loss Limitation Act,' said on Wednesday the measure seeks to amend Section 10 of Republic Act 7832, otherwise known as the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994.
According to Philippines News Agency, the bill said electricity rates in the Philippines remain among the highest in Asia, with residential consumers bearing a particularly heavy burden. It noted that a portion of the monthly power bill is made up of system loss charges, which include technical losses inherent in the transmission and distribution of electricity, as well as non-technical losses caused mainly by human error or deliberate pilferage.
Under the current law, utilities are allowed to recover system losses from consumers up to 14 percent for rural electric cooperatives and 9.5 percent for private electric utilities. Marcoleta's bill proposes to lower the cap to 1 percent from the effective date of the measure. It also seeks to completely prohibit the passing on of non-technical system losses to consumers, including those arising from pilferage, billing errors, meter misreading, and other causes linked to the negligence of power distributors.
In his explanatory note, Marcoleta said the current setup has 'disproportionately shifted' business risks to consumers while discouraging power firms from pursuing operational efficiency and better service delivery. 'This bill seeks to remedy the injustice in the current cost-recovery mechanism by capping the recoverable system loss rate to a uniform one percent for both private electric utilities and rural electric cooperatives, and by completely prohibiting the passing on of non-technical system losses to consumers,' he said.
It said the reform would promote fairness and accountability in the power sector while making electricity pricing more equitable, especially for poor and marginalized families. Under the measure, the Energy Regulatory Commission may still reduce or phase out technical or design losses as a component of system losses. The Department of Energy, in consultation with the Energy Regulatory Commission and other stakeholders, would be required to issue the implementing rules and regulations within 90 days from the effectivity of the proposed law.
