Senators grill energy officials over system loss charges

MANILA, Philippines — The Senate energy committee yesterday grilled officials of the Energy Regulatory Commission (ERC) and Department of Energy (DOE) over President Marcos’ call for Congress to pass a law scrapping system loss from electricity bills.

Panel chair Sen. Erwin Tulfo, who led the hearing, confronted ERC president and CEO Francis Saturnino Juan for the commission’s failure to curb soaring costs of electricity.

He said electric cooperatives and distribution utilities are charging system loss to consumers to recover technical losses in transmission as well as non-technical losses attributed to pilferage and illegal electricity connections using “jumpers.”

“We keep hearing complaints from these companies that they will lose billions if we take out the systems loss charge,” Tulfo said.“But let us be clear: this will not cause operational losses to distribution utilities. It will simply reduce their massive, multibillion-peso incomes. It is time we stop forcing everyday Filipino consumers to pay for electricity they never even used.”

Juan agreed that scrapping the pass-on charge due to non-technical causes could bring down the electricity bill.

However, he noted that the non-technical causes are just a small part of the total system loss, as the majority of losses are technical, like resistance in power lines and transformers as well as old equipment.

Senators Risa Hontiveros and Sherwin Gatchalian both agreed the generation charge should be targeted in moves to lower the cost of electricity, saying this comprises the bulk of the pass-on charge.

“The generation charge includes fuel and other expenses the industry is passing on to consumers. If the reforms ends only with system loss, then we will not be eradicating the real reason why our electricity is expensive,” Hontiveros said.

Gatchalian said he listened to the press briefing of Manila Electric Co. (Meralco) chairman Manny V. Pangilinan who expressed concerns over scrapping the total system loss.

“The point of the matter is consumers agree that it should not be passed on. Technical losses are not the fault of consumers, and neither is the jumper. These should not be passed on,” Gatchalian said.

The Senate is seeking to amend the 25-year-old Electric Power Industry Reform Act or EPIRA to scrap system loss and the corresponding value added tax.

A joint task force – composed of the DOE, ERC, National Electrification Administration and electric cooperatives – was formed to pursue the removal of system loss charges and value-added tax from electricity bills as well as coordinate a comprehensive review of the proposed power bill reforms.

Earlier, the Philippine Rural Electric Cooperatives Association, which represents 121 electric cooperatives, said it can back the complete removal of system loss charges from electricity billing if the government shoulders these costs through a dedicated subsidy mechanism.  –  Brix Lelis, Alexis Romero, Evelyn Macairan

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