Senator Escudero pushes for power firms to absorb system loss costs

MANILA – Sen. Francis “Chiz” Escudero has filed a bill that would stop distribution utilities from passing system loss charges on to electricity consumers and require power companies to absorb the costs themselves.

In a news release on Tuesday, Escudero said Senate Bill No. 2345 would amend Republic Act 9136, or the Electric Power Industry Reform Act of 2001, which currently allows utilities to recover a regulated portion of electricity lost during distribution.

The measure was filed after President Ferdinand R. Marcos Jr. directed the removal of system loss charges during his State of the Nation Address.

“Consumers should pay only for the electricity they actually consume,” Escudero said.

System losses include technical losses arising from the delivery of electricity through power lines and equipment, as well as non-technical losses caused by pilferage and unauthorized connections.

Escudero said consumers neither control the condition of distribution systems nor contribute to losses resulting from inefficient operations, outdated infrastructure or electricity theft.

Under the proposed amendment, utilities would no longer be allowed to recover from end-users the costs linked to technical inefficiencies or pilferage.

Escudero said the existing policy was adopted to recognize the operational realities of electricity distribution, but its continued application had become “increasingly difficult to justify.”

He said making utilities absorb such losses would push them to modernize their systems, strengthen anti-pilferage efforts and operate more efficiently.

“In so doing, it promotes fairness in electricity pricing and encourages greater operational efficiency,” Escudero said.

He added that the proposal would strengthen consumer protection and support the government’s broader goal of lowering electricity rates and improving regulatory oversight. (PNA)