Consumers should not end up paying the same system loss costs under a different item on their electricity bills, Senate Committee on Energy Chairperson Erwin Tulfo said as he pushed for the passage of a measure removing the charge.
Tulfo said Senate Bill No. 2486, or the proposed “Systems Loss Charge Removal Act,” contains provisions preventing distribution utilities and electric cooperatives from recovering allowed system losses through other charges.
The measure, which Tulfo sponsored on the Senate floor on Sept. 22, would prohibit the recovery of allowed losses through distribution wheeling, supply, metering and universal charges, subsidies, or any other item in the electricity bill.
“We have anticipated this loophole and it is unacceptable. We cannot remove systems loss from one line of the electricity bill only to see the same cost transferred somewhere else,” Tulfo said.
The senator said the provision was intended to prevent consumers from bearing the cost of electricity losses that they did not actually consume.
System loss refers to electricity lost through technical and non-technical causes as power is delivered from generation facilities to end-users. Distribution utilities and electric cooperatives currently pass allowable system loss costs on to consumers, subject to regulatory limits.
Tulfo questioned why consumers should shoulder costs arising from system losses and inefficiencies in electricity distribution.
“Why do consumers pay for electricity that they did not consume? Why do consumers bear the brunt of inefficiencies and deteriorating facilities resulting in systems loss?” he said.
He said consumers should not be made to carry both the cost of system losses and the consequences of inefficiencies in the electricity system.
Tulfo urged the Senate to expedite the proposed legislation, saying its enactment would remove what he described as unnecessary costs from consumers’ electricity bills.
The proposal comes as the government has also taken steps to reduce the burden of system loss charges. The Bureau of Internal Revenue issued Revenue Memorandum Circular No. 97-2026 in September, removing value-added tax on the allowable system loss charge within the cap approved by the Energy Regulatory Commission.
Tulfo said further action is needed beyond the VAT removal to address the system loss charge itself.
“Electricity is not a luxury. It is a basic necessity the modern society needs to operate with dignity,” he said.
“Let’s give Filipino consumers what they deserve: A reliable electricity and fair billing,” he added.
Photo courtesy of Inquirer.net
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