Senator Estrada pushes for refunds, hefty fines for system loss charges

MANILA – Power distributors that continue charging consumers for electricity lost in their systems would face multimillion-peso fines and be required to return prohibited collections with interest under a bill being pushed by Senator Jinggoy Estrada.

In a news release Monday, Estrada said Senate Bill No. 2474, or the proposed System Loss Charges Abolition Act, seeks to shift the cost of technical and non-technical system losses from electricity consumers to distribution utilities, electric cooperatives and other regulated entities.

For the first offense, the measure proposes a PHP5-million to PHP10-million fine and full refund of prohibited charges collected from consumers, plus legal interest.

A second offense would carry a PHP10-million to PHP20-million fine and a six-month suspension of the utility’s executive officers, while a third violation could prompt the Energy Regulatory Commission (ERC) to recommend to Congress the revocation of the entity’s franchise, aside from further fines and possible criminal liability.

“This measure seeks to rectify the ongoing injustice imposed against Filipino consumers who assume the responsibility of paying for electricity lost through no fault of their own,” Estrada said.

The bill would prohibit utilities from recovering system losses through electricity rates or any other charges, effectively treating such expenses as non-recoverable costs for rate-setting purposes.

“It is unconscionable, to say the least, to allow this unjust regime to persist any further. Hindi tama na singilin ka sa kuryenteng hindi mo naman nagamit. At lalong hindi tama na sa bulsa ng mga konsyumer ang singil dahil sa kapabayaan sa sistema (It is not right to charge consumers for electricity they did not use. More so, consumers should not pay for shortcomings in the system),” Estrada said.

System losses cover electricity dissipated during transmission and distribution due to technical factors involving conductors, transformers and distribution networks, as well as non-technical causes such as pilferage, meter-reading errors and tampering.

The issue has drawn several Senate proposals this year seeking to either eliminate or sharply limit the system-loss costs passed on to consumers. Senate President Sherwin Gatchalian, Senators JV Ejercito and Francis Pangilinan are among those who earlier filed measures addressing the charge.

The ERC has also told a Senate inquiry that recovery of both technical and non-technical system losses could eventually be reduced to zero, although regulators raised the need to consider the financial capacity of smaller utilities.

Estrada’s proposal addresses that concern by directing the ERC, Department of Energy and National Electrification Administration to help power distributors modernize infrastructure and reduce system losses.

Priority assistance would go to electric cooperatives in geographically isolated areas and those with persistently high losses, with support tied to measurable system-loss reduction plans.

The government has already removed value-added tax on allowable system-loss charges, a separate measure expected to shave around PHP20 from a typical consumer’s monthly electricity bill. (PNA)