Manila: Malaca±ang on Wednesday clarified that President Ferdinand R. Marcos Jr.'s proposal to remove system loss charges from electricity bills is intended to protect consumers from paying for avoidable costs and not to financially burden electric utilities, as the government studies amendments to the country's power reform law. Palace Press Officer Claire Castro issued the clarification after the Philippine Rural Electric Cooperatives Association (PHILRECA) warned that eliminating system loss charges without government support could result in financial losses for electric cooperatives.
According to Philippines News Agency, in a press briefing, Castro said the President's proposal seeks to end the long-standing practice of passing avoidable losses to consumers while encouraging distribution utilities to improve operational efficiency. 'Ang gusto po ng Pangulo ay matanggal itong extra cost sa ating mga kababayan, hindi naman para pasanin ang burden na ito ng mga consumers pati naman po ng mga utility companies (The President wants to remove this extra cost from consumers, but not to shift the burden either to consumers or to utility companies),' she said.
She said the administration wants electric utilities to strengthen monitoring systems and implement measures to reduce losses, particularly those caused by electricity theft and pilferage. 'Dapat itong sagutin ng utility companies... kailangan nilang gumawa ng programa para maiwasan ito. Kailangan na maging efficient din sila para maiwasan ang losses na napapasan ng ating mga kababayan (Utility companies should address these losses by putting in place programs to prevent them. They must become more efficient so these losses are no longer passed on to consumers),' Castro said.
She stressed that the proposal remains under study to ensure that reforms would not adversely affect power distributors. 'So, ito po ay inaaral dahil hindi po nais ng Pangulo na hindi rin maging maganda ang epekto nito sa mga utility companies (The proposal is still being studied because the President also does not want it to negatively affect utility companies),' she said.
Asked whether the government is considering subsidies for electric cooperatives, Castro said this is not currently being discussed. 'Sa pagsa-subsidize, hindi siya napag-uusapan. Ang kinakailangan din pag-aralan ng utility companies kung papaano nila maiiwasan na magkaroon ng losses (Subsidies are not being discussed. What utility companies should study is how they can prevent these losses),' she said.
During his fifth State of the Nation Address on Monday, Marcos called on Congress to amend the Electric Power Industry Reform Act (EPIRA) to prohibit charging consumers for system losses, including the value-added tax imposed on such charges. The President argued that consumers should not be made to shoulder costs arising from technical losses, electricity theft, or other inefficiencies beyond their control, saying the current practice unfairly inflates household electricity bills.
Under the EPIRA, distribution utilities are allowed to recover a portion of technical and non-technical system losses from consumers, subject to regulatory caps set by the Energy Regulatory Commission.
