Escudero files bill to ban system loss charges, making electricity more affordable

Sen. Francis "Chiz" Escudero has filed a bill prohibiting the recovery of system loss charges from electricity consumers by amending existing laws and make electricity more affordable for Filipino households.Senate Bill 2345 amends Republic Act 9136, or the Electric Power Industry Reform Act of 2001 (Epira), which currently allows distribution utilities to recover a portion of system losses incurred in the delivery of electricity.Escudero said the continued imposition of these charges "has become increasingly difficult to justify," noting that consumers "neither control nor contribute to the technical condition of the grid, nor are responsible for losses arising from inefficient operations, outdated infrastructure or electricity theft."Under the proposed amendment, distribution utilities will no longer be allowed to pass on costs arising from technical inefficiencies or electricity pilferage to end‑users."Consumers should pay only for the electricity they actually consume," Escudero said in his explanatory note, adding that the bill "promotes fairness in electricity pricing, encourages greater operational efficiency among distribution utilities, strengthens consumer protection, and contributes to the broader objective of making electricity more affordable for every Filipino."The senator said that the existing policy under Epira was originally adopted to recognize the operational realities of electricity distribution, where system losses may arise from technical factors inherent in power transmission and distribution, as well as from non‑technical causes such as electricity pilferage and unauthorized use."This bill is founded on the principle that consumers should pay only for the electricity they actually consume," Escudero said.He added that the measure seeks to instill accountability among power distributors by ensuring that inefficiencies and losses are absorbed by the utilities themselves, not by the public."In so doing, it promotes fairness in electricity pricing and encourages greater operational efficiency," Escudero said.The senator expressed confidence that the proposed reform will complement the government's broader energy agenda, which includes lowering power rates and improving regulatory oversight.President Ferdinand Marcos Jr., in his fifth State of the Nation Address, urged Congress to amend Epira and end the long-standing practice of passing system loss charges on to electricity consumers."It is not the fault of the consumer why there is systems loss. So it is not right that they are the ones to pay for it," the president said.Systems loss refers to the loss in the transmitted electricity to the grid up to the consumers.Systems losses may be caused by natural processes as power passes through transmission lines and by outright theft through illegal connections or tampering of electricity meters.For households and commercial establishments covered by the franchise of the Manila Electric Co., systems losses comprise about 5 percent of the electric bill.