MANILA (UPDATED) — The Department of Energy and the Energy Regulatory Commission favor a “phased” removal of non-technical system loss charges from consumers’ electricity bills.
They issued their position before the House Committee on Energy on Wednesday, as it tackled the President’s call for the removal of such charges.
The agencies made a distinction between technical system loss, which happens when electricity travels from the plant to the customers, and the non-technical, which refers to electricity that is lost through pilferage or damaged meters.
“The President was correct in saying that people should not be paying for electricity na hindi na (due to) the inefficiency of our coops. It is correct sir, but we don't also want coops to suffer too much na baka malugi sila at mawalan tayo ng electricity sa isang area. It has to be balanced,” Energy Secretary Sharon Garin said.
House bill vs system loss charges filed
“It should not be outright at hindi po unconditional ‘yung abolition at this time. Ang technical losses, ito po ay inherent doon sa pag-deliver ng kuryente. Kaya’t kung ipagbabawal ito, ‘yung gastos na associated doon sa system loss ay makakaapekto doon sa financial viability talaga po ng mga distribution utilities,” ERC Chairperson and CEO Francis Saturnino Juan added.
MERALCO BACKS PHASED REMOVAL
“Ang sabi ng Meralco, ‘yung kanilang non-technical system loss ay ilang porsyento lang po? So pag tinanggal na ‘yan, hindi na ire-recover sa consumer,” said ACT Teachers Party List Representative Antonio Tinio.
“What we’re supporting po is the phased implementation,” Engr. Ronnie Aperoche of MERALCO replied.
The National Electrification Administration also backs “the eventual elimination of non-technical loss component in the electricity bills imposed to consumers”, but said the technical loss, which is governed by the laws of physics, cannot be eliminated, but can be minimized.
NEA also warned that removing the charge for technical loss may affect the financial viability of cooperatives.
“As such, they will not be able to pay in full its suppliers, the gencos, and the wholesale electricity spot market. The continuing partial payments will eventually lead to indebtedness without a source of repayment,” NEA Administrator Antonio Almeda said.
Marcos wants systems loss charges removed from electricity bill; rooftop solar made easier
Bayan Muna Chairman Neri Colmenares argued there is no need to pass a new law to implement the President’s call for the removal of the system loss charge from electricity bills, as well as the VAT on it. He said the ERC can already do this.
But the Bureau of Internal Revenue said system loss should also be subject to VAT.
“Since the main business, which is distribution, generation and transmission of electricity is subject to VAT, system losses must also be subject to VAT,” Atty. John Estrella of the BIR replied.
The DOE called for a technical working group with the ERC, the NEA, electric cooperatives and distribution utilities to conduct a cost-benefit analysis of the needed investment to reduce or eliminate system loss. The House Committee on Energy gave the DOE until next week to submit the results of its assessment.