Senate Deliberates Bill to Remove System Loss Charge from Electric Bills

The Senate on Tuesday took up the bill removing the system loss charge in consumers’ electric bills, with many senators backing the measure. The move aims to correct the current situation where Filipinos pay for electricity they did not consume. Senator Erwin Tulfo, Committee on Energy Chair and sponsor of Senate Bill 2486 or the proposed “System Loss Charge Removal Act,” stated, “For too long, Filipinos have been paying for electricity that they did not use.” He added, “It is not a small amount. Nationwide, consumers shoulder billions of pesos a year in system loss charges. And until recently, consumers were also paying 12% Value Added Tax on top of that charge.” Tulfo emphasized, “Electricity is not a luxury. It is a basic necessity that modern society needs to operate with dignity.” The bill seeks to prevent power firms from automatically passing system loss charges to consumers. Instead, the Energy Regulatory Commission (ERC) will determine which costs are justifiable, reasonable, and necessary. This would also prevent power firms from passing system loss charges through other fees. “The bill also provides for a phased transition of up to three years, allowing the ERC to protect consumers while maintaining the reliability and viability of our distribution utilities,” Tulfo added. Senate President Sherwin Gatchalian also supported the measure as a co-sponsor, saying, “We will keenly observe the discussions about this measure here in the plenary, and we can legislate additional amendments to protect the ordinary consumer.” Senator Joel Villanueva also co-sponsored the measure, calling it a “simple but important bill.” He stated, “Every peso that is spared from an unjustified charge is a peso that can go back to food on the table, medicines, education, transportation, and livelihood. That is what fair billing means. That is what accountability in every electric bill should look like.” Meanwhile, Senator Bong Go highlighted that for a family paying around P4,000 per month for electricity, P200 goes to system loss. He expressed concern, stating, “Many of our citizens do not even know about the system loss. Their electricity bill is there and they pay for it without knowing what they are paying for. It is very unfair especially to our citizens who do not even know what they are paying for this system loss.” Senator Bam Aquino also supported the bill but proposed the removal of the VAT from the electric bill as well. “This will redound to a discount or to a savings of 12% of our electricity bill. It would be good to talk about this while we are exploring the removal of the system loss,” he said. The Senate suspended discussion of the bill to allow more time for lawmakers to assess the measure. President Ferdinand “Bongbong” Marcos Jr. first called for the removal of the system loss charge in the electricity bill during his fifth State of the Nation Address. Various government agencies have also sought ways to lower the bill, with the Bureau of Internal Revenue removing the VAT on the system charge. Source: GMA Money Philippines