Bill seeks to cap system loss charges paid by consumers


Senate Committee on Energy Chairman Sherwin Gatchalian has filed a bill that targets to reduce electricity rates as much as 16 centavos per kilowatt hour.

The Recoverable System Loss Act aims to lower the system loss cap from 8 percent to 5 percent for distribution utilities and 13 percent to 10 percent for electric cooperatives.

“It makes no sense to let consumers pay for what should be the responsibility of the private distribution utilities and electric cooperatives,” the bill read.

System loss cap is the maximum charge that can be passed on to consumers in compensation for the electricity loss in distribution system from the receiving point of private distribution utilities and electric cooperatives to the consumer’s metering point.

“Consumers should not be made to pay for what is ultimately the responsibility of distribution utilities and electric cooperatives. It is time for us to prioritize the welfare of Filipino households over the interests of power sector insiders,” Gatchalian said.

The bill also seeks to exempt the system loss cap from Value Added Tax (VAT). It will also prohibit power distributors from passing non-technical system losses and power expenses of electric companies to its consumers.

The Senator estimates that the bill will save as much as P386 million pesos a month on electricity cost.

“Through this measure, we hope to help make electricity more affordable for Filipino households which have to contend with some of the most expensive power rates in the world. Considering the rising costs of food, education, and other necessities, helping people save money on their monthly electricity bills will improve the lives of millions of Filipinos,” Gatchalian said.