Bill Filed to Ban Electricity System Loss Charges to Consumers

A bill has been filed in the Philippines seeking to prohibit electricity companies from passing system losses on to consumers. Senator Francis Joseph “Chiz” G. Escudero filed Senate Bill No. 2345, or the proposed No System Loss Charge Act, which would ban the recovery of system loss charges and any other charges intended to circumvent this prohibition. The measure also proposes a six-month transition period and directs the Energy Regulatory Commission (ERC) to revise its rate-setting guidelines. Mr. Escudero stated that the proposal aims to promote fair electricity pricing, improve operational efficiency among distribution utilities, and make electricity more affordable. Historically, electricity bills in the Philippines have included charges for system losses incurred during the transmission and distribution of power, in addition to the costs for grid maintenance and operation. These system losses, arising from factors such as aging infrastructure, pilferage, and inefficiencies in the grid, have often been cited as a reason for high electricity prices, with consumers bearing the brunt of these costs. The filing of this bill is seen as a response to calls for reduced economic burden on citizens and improved overall efficiency of the power infrastructure. As electricity demand continues to rise, particularly in urban centers, challenges related to infrastructure development and operational efficiency have been noted. Stabilizing electricity prices is therefore considered crucial for economic growth.