Sen. Chiz Escudero has filed Senate Bill No. 2345, aiming to completely prohibit distribution utilities from passing system loss charges on to electricity consumers, arguing that Filipinos should pay only for the electricity they actually use.
Filed on July 28, a day after President Bongbong Marcos’ State of the Nation Address, the bill seeks to amend the Electric Power Industry Reform Act of 2001 (EPIRA), which allows distribution utilities to recover part of their system losses from consumers.
Escudero said system loss charges have become increasingly unjustifiable because consumers “neither control nor contribute to the technical condition of the grid, nor are responsible for losses arising from inefficient operations, outdated infrastructure or electricity theft.”
The measure imposes a complete pass-through prohibition, barring distribution utilities from recovering any technical or non-technical system losses, whether directly or indirectly, from electricity consumers.
It also contains a strict anti-circumvention provision, making it unlawful for utilities to reclassify, rename or conceal system losses under other charges or accounting treatments to get around the prohibition.
“Consumers should pay only for the electricity they actually consume,” Escudero said in his explanatory note. The bill gives distribution utilities a six-month transition period to completely phase out and discontinue all system loss charges after the law takes effect.
During the same six-month period, the Energy Regulatory Commission would be required to revise all rate-setting methodologies and regulatory guidelines to ensure full compliance with the new policy.
Escudero said the current EPIRA framework was originally intended to recognize operational realities in electricity distribution, including technical losses and non-technical losses such as electricity pilferage, but argued that consumers should no longer bear those costs.
Escudero expressed confidence that the measure would support the government’s broader efforts to reduce electricity costs and strengthen oversight of the power sector.
