A measure filed in the House of Representatives aims to prohibit private electric utilities from passing system loss charges to consumers and limit recoverable losses for rural electric cooperatives (RECOs) to five percent.

House Bill No. 6976, introduced by Cavite Rep. Lani Mercado-Revilla, Agimat party-list Rep. Bryan Revilla, and Cavite Rep. Ramon Jolo Revilla III, proposes amending Republic Act No. 7832, also known as the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994.

The bill specifies: “Private Electric Utilities are hereby prohibited from charging or passing-on their system losses to their consumers.”For rural cooperatives, system loss charges would be limited “only to design fault and technical loss as defined by the Energy Regulatory Board (ERC), which in no case shall be more than five percent (5%).”

HB 6976 requires that system loss charges be calculated annually based on the previous year’s costs and revenues and verified by the ERC to ensure only legitimate costs are recovered. The measure also exempts system loss charges imposed by RECOs from 12% value-added tax, citing concerns about a “double burden” on consumers.

In the bill’s explanatory note, Mercado-Revilla and her colleagues said: “For about thirty years now, the power distributors have not improved on efficiency of power distribution to their customers and have not made measures to deter illegal pilferage.” They stressed that current practices “allowing these to be charged to consumers by operation of law…is at the expense of the people.”

The proposed law would direct cooperatives to use collected system loss charges for efficiency improvements, with a long-term goal of gradually eliminating recoverable system losses.

HB 6976 follows a series of similar legislative proposals in recent years aimed at protecting consumers from unfair electricity charges. In the 19th Congress, House Bill No. 160, filed by Reps. Rodante Marcoleta and Caroline Tanchay, sought to prohibit distribution utilities from passing non-technical system losses to consumers, while House Bill No. 8231, filed by Rep. Luis Raymond Villafuerte, proposed a temporary suspension of VAT on system loss charges.

At the Senate level, Senate Bill No. 2300, introduced by Sen. Francis Escudero, aimed to institutionalize system loss caps across distribution utilities. All of these bills remain pending in their respective committees.

More recently, House Bill No. 459, filed by Rep. Salvador Pleyto Sr. in the 20th Congress, proposed a binding cap on system losses for all electric distribution utilities. Like the earlier measures, it has yet to progress beyond committee referral.

If enacted, HB 6976 could shift electricity billing practices and influence the financial operations of distribution utilities and cooperatives. How should energy stakeholders respond? 

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