Senate measure removing system loss charges reaches plenary

MANILA, Philippines — The bill seeking to remove system loss costs incurred by electric providers to consumers reached the Senate floor on Tuesday.

Sen. Erwin Tulfo stood before the plenary to sponsor Senate Bill No. 2486, otherwise known as the “Systems Loss Charge Removal Act.”

READ: Sona promise: Lower power bills as VAT on system loss out

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In his sponsorship speech, Tulfo said the measure intends to remove system loss charges from consumers’ electricity bill by making distribution utilities shoulder the cost and mandating the Energy Regulatory Commission (ERC) to vet costs charged from consumers.

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“Instead of automatically allowing system loss as a pass-through charge, the ERC will determine what costs are prudent, reasonable, and necessary in an efficiently operated distribution system,” said Tuflo.

The bill also already addresses a possible loop hole where the cost for the system loss would only be transferred somewhere else.

“This bill expressly prohibits distribution utilities and electric cooperatives from recovering allowed losses through distribution wheeling charges, supply charges, metering charges, universal charges, subsidies, or any other item in the bill,” said Tulfo.

The senator then noted that the measure is not “anti-business,” explaining that it actually intends to make inefficiency “costly” thereby compelling distribution utilities to actually address it.

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“Kapag utility na ang sasalo sa gastos, mas may dahilan silang pigilan ang pagnanakaw, ayusin ang metro, palitan ang lumang kagamitan, at pagandahin ang serbisyo,” said Tulfo.

(When utilities shoulder the cost, they have more incentive to prevent theft, fix meters, replace old equipment, and improve service.)

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Furthermore, 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 distribution utilities.

Meanwhile, in co-sponsoring the measure, Senate president Sherin “Win” Gatchalian stressed that the issue on system loss charges is not of money, but “fairness, transparency and consumer welfare.”

“Ang pangunahing layunin ng panukalang ito ay gawing mas patas ang singil sa kuryente para sa ating mga kababayan,” said Gatchalian.

(The main objective of this measure is to make electricity rates fairer for our countrymen.)

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He also committed to monitor the issues regarding this bill in plenary and propose additional amendments for the protection of ordinary consumers. /mr