House Speaker Faustino Dy III, along with Majority Leader and Ilocos Norte Rep. Ferdinand Alexander Marcos, has filed a bill against system loss, asserting power consumers must not pay for losses caused by power theft, faulty meters, weak collection systems, poor maintenance, inefficient operations or negligence by distribution utilities.
The proposed House Bill No. 10430 or the Systems Loss Charge Abolition Act would remove system loss as a separate component of electricity bills.
The measure declares that consumers should be protected from charges arising from conditions within the control of distribution utilities while allowing the recovery of costs genuinely necessary for efficient electricity delivery.
“President Ferdinand Marcos Jr. has placed high electricity costs at the center of the national agenda, and Speaker Bojie Dy and I are drawing a fair line: consumers should pay for efficient service, not for theft, negligence or operational failures they did not cause. This should not be the insurance policy in the monthly bil of an ordinary family for the negligence of the (power) utility to stop them,” Marcos said.
Under the bill, distribution utilities could not recover disallowed system losses through wheeling charges, supply charges, metering charges, universal charges, subsidies or any other item appearing on the monthly bill.
The Energy Regulatory Commission would determine what limited portion of electricity necessarily consumed in the efficient operation of a distribution network may be recovered as part of the distribution wheeling charge.
Costs arising from illegal electricity use, power theft and the theft or destruction of electrical lines, equipment and materials could no longer be passed on to paying customers.
The same prohibition would cover losses caused by defective or inaccurate meters, billing and collection deficiencies, inadequate maintenance, inefficient operations, negligence and other causes reasonably within the utility’s control.
Distribution utilities would retain the right to recover prudent and reasonable costs necessary to maintain reliable service and remain financially viable.
The ERC would implement the reform in phases to protect consumers without disrupting electricity reliability or destabilizing properly managed utilities.
The transition must progressively reduce the costs recoverable from end-users and be completed within three years from the effectivity of the implementing rules.
The regulator would also establish minimum efficiency standards for distribution utilities, including benchmarks for service interruption frequency and collection performance.
“This is not a blanket denial of legitimate costs, and that distinction matters to the President and Speaker Dy. Utilities that operate efficiently may recover prudent expenses, but costs born of controllable losses must remain where responsibility belongs,” Marcos pointed out.
The ERC would issue the implementing rules within 90 days in consultation with the DOE, distribution utilities, consumer groups and other stakeholders, with the law taking effect 15 days after publication.