Senator Erwin Tulfo led the Senate Energy Panel in aggressively pushing to legislate the scrapping of systems loss charges from consumer electricity bills, clarifying that the move will not bankrupt power distribution companies but will simply trim their immense corporate profit margins.
Presiding over the hearing, Tulfo challenged claims from power distributors and generators who argue that removing the charges will result in a crippling ₱60 billion loss for the energy industry.
“We keep hearing complaints from these companies that they will lose billions if we take out the systems loss charge,” the legislator said.
“This will not cause operational losses to distribution utilities. It will simply reduce their massive, multi-billion-peso incomes.”
“But let us be clear: this will not cause operational losses to distribution utilities. It will simply reduce their massive, multi-billion-peso incomes. It is time we stop forcing everyday Filipino consumers to pay for electricity they never even used,” the lawmaker added.
The senator made the statement following the President’s State of the Nation Address (SONA), which explicitly ordered the immediate reduction or total elimination of system loss charges passed on to electricity consumers.
During the hearing, he confronted the Energy Regulatory Commission if it is true that the electricity industry will incur losses with the elimination of system loss charges.
“Totoo ba malulugi po (ang distribution and generation companies)? Is it, is that true kung alisin natin? So, for example, we start with non-technical systems loss. Malulugi po ba?” Tulfo asked.
ERC Chair Francis Saturnino San Juan said that since technical system loss comprises only 1.5 percent of the entire system loss, this amounts to just a pinch from their huge income.
“So, kabawasan sa kita nila. Hindi sila maba-bankrupt kung alisin natin ang systems loss,” Tulfo exclaimed.
Juan confirmed that the regulatory body is fully prepared to enforce the removal. However, because systems loss is currently protected as a “pass-through” cost under existing laws, Congress must first amend Section 43(f) of the Electric Power Industry Reform Act (EPIRA).
The ERC chief explained that under the current framework, utilities are allowed to recover the costs of electricity that is procured from power plants but lost during transmission or through pilferage before reaching households.
Tulfo emphasized that forcing private distribution companies to absorb these technical and non-technical losses will compel them to improve their own grid infrastructure and efficiency, rather than taking the easy route of billing the public for their operational inefficiencies.
“Our priority is the welfare of our consumers.”
“The President’s mission is clear, and our priority is the welfare of our consumers,” he stressed.
“These big power companies have been enjoying massive profits for decades. It is only fair that they absorb these operational costs to provide long-overdue financial relief to millions of Filipino families,” Tulfo concluded.
