Erwin Tulfo: System loss fee removal cannot be recovered as hidden charges

Senator Erwin Tulfo on Sunday said electric companies cannot recover the proposed removal of system loss charges through other means, such as disguising them as hidden line items on consumers' bills.

As chairperson of the Senate Committee on Energy, Tulfo sponsored Senate Bill No. 2486, or the “Systems Loss Charge Removal Act,” on the Senate floor.

System loss refers to electricity lost during transmission and distribution, whether due to technical inefficiencies or illegal activities such as the use of “jumpers” or electricity pilferage.

“We have anticipated this loophole, and it is unacceptable. We cannot remove system loss from one line of the electricity bill only to see the same cost transferred somewhere else,” Tulfo said in a press release.

“This is why the bill we are shepherding now explicitly 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,” he added.

Tulfo made the clarification following concerns from consumers that power distributors might simply recover the eliminated charges through increases in distribution or supply fees.

The senator said consumers should not have to pay for electricity they never consumed or bear the financial burden of utility operational losses.

During his fifth State of the Nation Address, President Ferdinand Marcos Jr. expressed support for amending the Electric Power Industry Reform Act (EPIRA) to stop power distributors from passing system loss charges, along with the corresponding value-added tax (VAT), on to consumers.

Under existing laws, including EPIRA and Republic Act No. 7832, or the Anti-Pilferage of Electricity and Theft of Electric Transmission Lines/Materials Act, power distributors are allowed to pass a portion of electricity lost during transmission and distribution on to end-consumers through system loss charges included in their monthly bills. — MCG, GMA News