NINETEENTH CONGRESS OF THE }
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION

HOUSE of REPRESENTATIVES

House Bill No. 341

Introduced by: HON. DANILO RAMON S. FERNANDEZ
Lone District of Santa Rosa City, Laguna

EXPLANATORY NOTE

‘This bill seeks to amend section 10 of Republic 7832, otherwise known as
“An Act Penalizing the Pilferage of Electricity and Theft of Power Transmission
Lined Materials, Rationalizing System Losses by Phasing out Pilferage Losses as
Component thereof, and for other purposes’

The increasing electricity rates of private electric utilities and rural electric
cooperatives nowadays have already reached monumental heights. One of the notable signs
is the fact that these rates show power utilities are passing the burden of the so-called
systems losses on to consumers.

It is unfair to pass such burden to the consumers of electricity.

Consumers should not be responsible for the systems losses - whether man-made or
mechanically-caused.

It seems that if the power firms make money, they keep it as profits. If they lose, they
pass it on to their customers. That is not free enterprise at all. That is charging their losses,
fooling the people twice over because we are even told that the payments for systems losses
are subjected to VAT fees too, that we have to bear.

These losses are the losses of the electric utilities. As members of an income-
generating industry, these utilities should bear these losses exclusively.

Moreover, a huge percentage of the population live under the poverty line, and with
the increasing power rates, coupled with the recent shortages in rice distribution, the poor

can hardly cope even with ordinary daily expenses.

In view of the foregoing, the immediate approval of this measure is earnestly sought.

DANILO S$. FERNAND)
Lone District of Santa Rosa City, Laguna


NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE of REPRESENTATIVES

House Bill No. 341

Introduced by: HON. DANILO RAMON 8. FERNANDEZ
Lone District of Santa Rosa City, Laguna

AN ACT AMENDING SECTION 10 OF REPUBLIC ACT 7832
OTHERWISE KNOWN AS AN ACT PENALIZING THE PILFERAGE
OF AND THEFT OF POWER TRANSMISSION LINESIMATERIALS,

RATIONALIZING SYSTEM LOSSES BY PHASING OUT PILFERAGE

A COMPONENT THEREOF, AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 10 of Article 7832 is hereby amended as follows:

[Rationalization of System Losses by Phasing out Pilferage Losses as a
Component Thereof. - There is hereby established a cap on the recoverable

rate of system losses as follows:

(a) For private electric utilities:

() Fourteen and a half percent (14 % %) at the end of the first year
following the effectivity of this Act;

(i) Thirteen and one-fourth (13 %4 %) at the end of the second year
following the effectivity of this Act;

(iii) Eleven and three-fourths percent (11 % %) at the end of the
third year following the effectivity of this Act; and

(iv) Nine and a half percent (9 ¥ %) at the end of the fourth year
following the effectivity of this Act.


Provided, That the ERB is hereby authorized to determine at the end
of the fourth year following the effectivity of this Act, and as often as may
be necessary taking into account the viability of private electric utilities and
the interest of the consumers, whether the caps herein or theretofore
established shall be reduced further, which shall, in no case, be lower than
nine percent (9%) and accordingly fix the date of the effectivity of the new
caps: Provided further, That in the calculation of system loss, power sold by
NPC or any other entity that supplies power directly to the consumer and
not through the distribution system of the private electric utility shall not be
counted even if the billing for the said power is used through the private
electric utility.

The term "power sold by NPC or any other entity that supplies
electricity to directly to a consumer’ as used in the preceding paragraph shall
for purposes of this section be deemed to be sale directly to the consumer if:

(1) the point of metering by the NPC or any other utility is less than one
thousand (1,000) meters form the consumer, or

(2) the consumer's electric consumption is three percent (3%) or more of
the total load consumption of all the customers of the utility, or

(3) there is no other consumer connected to the distribution line of the

utility which connects to the NPC or any other utility point of
metering to the consuming meter.
(b) For rural electric cooperatives:
(i) Twenty-two percent (22%) at the end of the first year following

the effectivity of this Act;

(ii) | Twenty percent (20%) at the end of the second year following the
effectivity of this Act;

(iii) Eighteen percent (18%) at the end of the third year following the
effectivity of this Act;

(iv) Sixteen percent (16%) at the end of the fourth year following the
effectivity of this Act; and


(v) Fourteen percent (14%) at the end of the fifth year following the
effectivity of this Act.

Provided, That the ERB is hereby authorized to determine at the end
of the fifth year following the effectivity of this Act, and as often as is
necessary, taking into account the viability of rural electric cooperatives and
the interest of consumers, whether the caps herein or theretofore
established shall be reduced
further which shall, in no case, be lower than nine percent (9%) and

accordingly fix the date of the effectivity of the new caps.

Provided finally, That in any case nothing in this Act shall impair the
authority of the ERB to reduce or phase out technical or design losses as a

component of system losses]

“THE COSTS OF SYSTEM LOSSES SHALL NOT BE
CHARGEABLE OR PASSED ON TO THE CONSUMERS AND
SHALL BE FOR THE ACCOUNT OF THE PRIVATE ELECTRIC
UTILITIES AND/OR RURAL ELECTRIC COOPERATIVES.”

SECTION 2. All laws, decrees, executive orders, proclamations, rules and
regulations, or parts thereof inconsistent herewith are hereby repealed or
modified accordingly.

SECTION 3. This Act shall take effect fifteen (15) days after its publication
in at least two (2) national newspapers of general circulation.

Approved.