DOE forms joint task force to remove VAT, system loss charges from electricity bills

MANILA, Philippines — The Department of Energy (DOE) has created an inter-agency Joint Task Force alongside key power sector regulators and distributors to carry out the president’s directive to eliminate system loss charges and their corresponding Value-Added Tax (VAT) from monthly electric bills.

In a statement on Thursday, July 30, the newly formed body unites the DOE, the Energy Regulatory Commission (ERC), the National Electrification Administration (NEA), and electric cooperatives nationwide.

“The Joint Task Force will coordinate the technical, regulatory, and legislative work needed to advance the Administration's commitment to fairer electricity rates, stronger consumer protection, and a more efficient power sector,” the DOE said.

The formation of the task force follows President Marcos Jr.’s Fifth State of the Nation Address (SONA) on July 27, where he urged the Congress to legislate on laws to amend the Electric Power Industry Reform Act of 2001 (EPIRA) and called on to scrap the “system loss” being charged by the power concessionaires.

In response, the DOE said that it convened meetings with the ERC and the Manila Electric Company (MERALCO) to outline the regulatory framework and necessary policy adjustments.

“The Department is likewise engaging other private distribution utilities to ensure that the reforms focus on delivering meaningful savings for consumers and operationally efficient electricity services.” the DOE.

Through the joint task force, the DOE added that the agencies will submit technical recommendations to help both Houses of Congress craft enabling legislation in amending the EPIRA.

“Beyond legislative reforms, the DOE, together with the ERC, NEA, electric cooperatives, and industry stakeholders, is also advancing complementary measures to reduce system losses at their source through improved operational efficiency, strengthened enforcement against electricity theft, and the modernization of distribution networks. These initiatives reinforce the Administration's objective of lowering electricity costs while building a stronger and more efficient power system for the future,” the DOE said.

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