Marcos Seeks Removal of Systems Loss Charges and VAT on Electricity Bills

MANILA, Philippines — Amidst widespread complaints over soaring electricity bills, Philippine President Ferdinand "Bongbong" Marcos Jr. has called for the removal of "systems loss" charges passed on by power utilities to consumers, along with the value-added tax (VAT) levied on these fees. This significant policy shift necessitates amendments to the Electric Power Industry Reform Act (EPIRA), a law enacted 25 years ago. Speaking during his State of the Nation Address (SONA), President Marcos highlighted the burden on citizens already grappling with elevated fuel prices due to the ongoing conflict in the Middle East. "If we're talking about reducing the price (of electricity), I believe it is time to scrap the systems loss that is being passed on to consumers. It is being passed on to consumers and added to the bill with value-added tax on top of it," he stated, receiving a standing ovation from lawmakers. He emphasized that consumers should not be held responsible for systems loss, as it is not their fault. Systems loss refers to the reduction in electricity transmitted through the grid to consumers. It can stem from natural physical losses during transmission or from electricity theft, such as illegal connections and meter tampering. For households and businesses served by Manila Electric Co. (Meralco), these losses typically account for about five percent of their electricity bills. The 2001 EPIRA law permits utilities to pass these costs onto their customers, making legislative reform crucial for the President's directive. In addition to addressing systems loss, President Marcos urged Congress to swiftly pass the proposed "Sariling Kuryente Act," which aims to simplify and reduce the cost of installing solar panels and battery storage systems for individuals. He also reiterated his call for the reconsideration of nuclear energy as a power source, citing advancements in safety and its potential to enhance energy security and lower electricity costs. Marcos also noted the ratification of the Framework Agreement on Petroleum Security for joint energy asset stockpiling in the region, particularly during the Philippines' chairmanship of the Association of Southeast Asian Nations (ASEAN). With the full interconnection of the Luzon, Visayas, and Mindanao grids, he announced that the country is better positioned to collaborate with neighboring nations towards realizing the ASEAN Power Grid. The government is closely monitoring approximately 200 power projects slated for completion by the end of his administration, collectively representing nearly 10,000 megawatts of capacity. Source: Philstar Nation