Senate moves to shield consumers from power losses

The Senate is moving to tighten rules on electricity system losses, with lawmakers pushing to ensure that consumers are not charged for power losses caused by theft, illegal connections, meter tampering, and other problems that utilities can prevent.

Senator Erwin Tulfo, chair of the Senate Committee on Energy, said the policy should clearly distinguish unavoidable technical losses from non-technical losses resulting from inefficiencies and illegal activities.

“We should not subsidize inefficiency,” Tulfo said, stressing that consumers who regularly pay their electricity bills should not be made to shoulder costs that distribution utilities can control or reduce.

The issue gained traction during the committee’s hearing after Energy Regulatory Commission Chairperson and CEO Francis Saturnino Juan said the recovery of non-technical system losses from electricity consumers could potentially be prohibited completely.

Juan told senators that non-technical losses currently represent only about 1 percent based on distribution utilities’ performance, suggesting that removing these costs from consumer bills would not seriously threaten the financial viability of power distributors.

He added that utilities could still be allowed to recover through tariffs the costs of programs designed to prevent electricity theft and address meter-related problems.

Tulfo acknowledged that some electricity is inevitably lost as power travels through transmission and distribution networks. However, he questioned the practice of passing on losses resulting from electricity pilferage, illegal connections and meter manipulation to customers who pay their bills properly.

The Department of Energy backed the consumer-protection push, saying preventable losses should not simply become an additional burden on households and businesses.

DOE Undersecretary Riolita Inocencio said distribution utilities and electric cooperatives, however, would need stronger government support in combating electricity theft. She also floated possible amendments to the Anti-Pilferage Law to make it easier for utilities to identify illegal connections and obtain assistance from law-enforcement agencies.

The Senate panel is weighing several approaches, including lowering the amount of system losses that utilities are allowed to recover from consumers and eliminating certain system-loss charges altogether.

Bills seeking changes to the policy have been filed by Senators JV Ejercito, Francis Escudero, Francis Pangilinan and Senate President Sherwin Gatchalian. Tulfo has also filed a resolution calling for an inquiry into the existing system-loss rules.

For Tulfo, the debate has shifted from whether electricity losses occur to determining which losses consumers should legitimately pay for and which should be absorbed or addressed by the companies responsible for reducing them.

The committee is expected to further assess whether reforms should apply to all system losses or focus specifically on non-technical losses, while ensuring that consumer protection does not undermine the ability of distribution utilities and electric cooperatives to maintain and improve their networks.