Philippines Eyes Up to 10% Savings on Electricity Bills as System Loss Charges May Be Scrapped

Households in the Philippines may see their electricity bills reduced by up to 10% if the government scraps system loss charges imposed by electric firms, the Department of Energy (DOE) announced on Tuesday. "It may result to about 5 to 10% because we have some distribution utilities whose system losses can go as high as 16%. So we see the immediate effect is that we save at least 5% but it can go as high as 10% per kilowatt hour," said DOE Undersecretary Mario Marasigan in a virtual presser. During his fifth State of the Nation Address on Monday, President Ferdinand “Bongbong” Marcos Jr. called on both chambers of Congress to amend the Electric Power Industry Reform Act (EPIRA) to put a stop to system loss charges, including an accompanying value-added tax (VAT), from being passed on to consumers. Current laws such as the EPIRA and Republic Act No. 7832 or the Anti-Pilferage of Electricity and Theft of Electric Transmission Lines/Materials Act allow distribution utilities to recover a portion of system loss from end-consumers through system loss charge reflected in monthly electricity bills. "Because pilferage and system losses shouldn't be paid for by other paying consumers... Because the inefficiency of an electric cooperative or distribution utility should not be compensated for by the people paying for electricity," said DOE Secretary Sharon Garin during the presser. The DOE said that it is already working with the Energy Regulatory Commission (ERC) and the National Electrification Administration (NEA) on how to implement the president's directive. However, the department admitted that the implementation may take at least a year. "I would say before the next SONA, one year. It's not that simple or easy. We can issue policies but the implementation side of the electric coop, they have to purchase some new equipment. It will take time talaga," said Garin. Manila Electric Company (Meralco), on the other hand, earlier said that it would want to talk with Marcos as the scrapping of the system loss charges may impact power distribution utilities’ operational and financial health. —VAL, GMA News