Philippines Aims for Lower Electricity Costs with Proposed Bills

LAWMAKERS have filed two measures seeking to lower electricity costs by abolishing system loss charges passed on to consumers and easing regulatory requirements for households and businesses that generate electricity for their own use. In separate statements on Sunday, Speaker and Isabela Rep. Faustino “Bojie” G. Dy III and Ilocos Norte Rep. Ferdinand Alexander A. Marcos III said they filed House Bills No. 10430 and 10431 to implement President Ferdinand R. Marcos, Jr.’s call to reduce electricity costs following his fifth State of the Nation Address (SONA). “President Ferdinand ‘Bongbong’ 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,” Mr. Marcos said. He added that households and businesses capable of generating and storing their own electricity “should be free to invest in their own power supply under fair and uniform rules” instead of being treated like commercial power producers. House Bill No. 10430 or the proposed System Loss Charge Abolition Act will prohibit distribution utilities from passing on to consumers system losses resulting from power theft, faulty meters, poor maintenance, inefficient operations, billing and collection deficiencies, negligence and other avoidable causes. Instead, the Energy Regulatory Commission (ERC) would determine the limited portion of electricity necessarily consumed in the efficient operation of a distribution network that may be recovered as part of the distribution wheeling charge. The bill will also require the ERC to establish minimum operational efficiency standards for distribution utilities, including performance benchmarks on service interruptions and collection efficiency. It provides for a three-year transition period to allow utilities to adjust to the new rules while continuing to recover prudent and reasonable operating expenses needed to ensure reliable electricity service. Meanwhile, House Bill No. 10431 or the proposed Sariling Kuryente Act seeks to amend the Electric Power Industry Reform Act (EPIRA) by exempting households and businesses that generate electricity exclusively for their own consumption from regulations governing commercial power producers. Under the proposal, owners of behind-the-meter solar panels, battery storage systems and other self-generation facilities equipped with certified nonexport technology would no longer be required to secure a certificate of compliance or prior authorization from the ERC. Distribution utilities will also be prohibited from requiring prior approval, additional agreements, technical studies, meter replacements or extra charges for qualified nonexporting systems. System owners will only be required to notify their utility after installation. The measure also directs the Department of Energy (DoE) to promote wider adoption of behind-the-meter generation through improved access to financing, qualified installers and reliable equipment while reducing administrative barriers. The ERC will be tasked with issuing the implementing rules for the System Loss Charge Abolition Act within 90 days, while the DoE, in coordination with the ERC, will draft the implementing rules for the Sariling Kuryente Act. Separately, Senate Energy Committee Chairman Erwin T. Tulfo renewed his call for power distribution utilities to support measures removing system loss charges from electricity bills. “Let’s lighten the load of Filipinos and remove system loss charges,” Mr. Tulfo said in a statement. “If you look at the bill, it’s only a few hundred pesos, but it’s a big deal for our poor countrymen. That could already buy rice or fuel.” He also urged power companies to cooperate with Congress in pursuing reforms aimed at lowering electricity costs, saying they have a social responsibility to consumers. Following Mr. Marcos’ SONA, several bills have been filed in the Senate seeking to abolish system loss charges, exempt such charges from value-added tax, repeal energy taxes and amend EPIRA to lower electricity rates. — Pexcel John Bacon and Kaela Patricia B. Gabriel