Manila: The Senate Committee on Energy continued its hearings on proposed amendments to the Electric Power Industry Reform Act (EPIRA), taking up measures to implement President Ferdinand R. Marcos Jr.'s directive to remove system-loss charges and their corresponding value-added tax (VAT) from electricity bills.
According to Philippines News Agency, Committee Chair Senator Erwin Tulfo included the proposals in the hearing agenda following the President's State of the Nation Address. Tulfo acknowledged that while the reforms could impact government revenues and the power industry, the primary goal is to reduce the financial burden on citizens. He stated his belief that eliminating these charges would ease the burden on the population.
Senator Joseph Victor "JV" Ejercito emphasized that the committee's ongoing review of EPIRA should convert the President's directives into tangible relief for households facing high electricity costs. Ejercito introduced Senate Bill No. 2342 to abolish recoverable system-loss charges and Senate Bill No. 2343 to remove the VAT imposed on electricity bills. He cited Department of Energy estimates suggesting a 5 percent to 10 percent reduction in electricity bills if system losses were eliminated, pointing out that existing caps are set at 5.5 percent for private distribution utilities and 8.25 percent for electric cooperatives.
Senator Risa Hontiveros highlighted the need for a broader overhaul of electricity pricing, noting that generation charges constitute a larger portion of monthly bills. She called for a transparent review of industry expenses before they are passed on to consumers. Hontiveros urged that any legislative changes should translate into noticeable reductions in electricity costs for consumers.
Energy Regulatory Commission (ERC) representative Francis Saturnino Juan stated that the agency would fully implement the removal of recoverable system losses once Congress amends the law. He noted that a new mechanism would be necessary to allocate unavoidable technical losses among distribution utilities, generators, transmission operators, and other stakeholders. The ERC also concurred that non-technical losses due to electricity theft, illegal connections, and meter tampering could be assigned a zero-recovery cap.
Senator Tulfo indicated that the committee might prioritize removing non-technical losses and the VAT imposed on them while examining how to address unavoidable technical losses. He stressed the importance of addressing issues like pilferage, illegal metering, and tampering, asserting that these should not be charged to the public.
