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Republic of the Philippines pate; © wr
HOUSE OF REPRESENTATIV! hs ite Soares
ZB Sep
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Quezon City, Metro Manila

SIXTEENTH CONGRESS,

First Regular Session

2635

House Bill No.

INTRODUCED BY REPRESENTATIVE XAVIER JESUS “XJ” D. ROMUALDO

EXPLANATORY NOTE
The late Representative Pedro P. Romualdo originally filed a version of this bill in the 14" and
15" Congresses. In the 14" Congress, the Committee on Energy deliberated upon this bill
exhaustively. A technical working group, with the participation of electric power industry
players and stakeholders, ironed out the issues and concerns of the electric power industry and
the consuming public regarding the pilferage of electricity and electric power lines, equipment,
and materials. Unfortunately, the 14" Congress was unable to pass the measure and, though it

‘was re-filed, it was not tackled during the 15" Congress.

‘The Explanatory Note of the late Representative Romualdo is herein reproduced and adopted as

part of the explanation for the filing of this bill:

Republic Act (RA) No. 7832 was passed into law in 1994 during the 9" Congress
with the legislative intent to curb the illegal use of electricity and theft of electric
power transmission lines and materials as well as provide penalties to discourage
perpetrators from committing these offenses. Nearly two (2) decades from the
implementation of this law, the problem on illegal use of electricity and theft of
electric power transmission lines and materials has not dissipated and has remained

unabated.

Industry players have estimated their losses to reach billions of pesos prior to the

passage of RA No. 7832. Therefore, it is only appropriate that we review this law to


respond to the needs of the time. This has become a huge concer for the
government, the industry players and the general consumers due to its impact on the

total cost of electricity.

This proposed measure would bring better benefits to the Filipino consumers and
also protect the property of industry players such as generation companies,
transmission companies, and distribution utilities, including electric cooperatives and

private utilities, from pilferage and destruction,

The new provisions would provide the judicial and executive departments a better

is will avoid what we call executive

description of the true intent of the legislature. 1

or judicial legislation in the interpretation of the law.

‘The issue on maximum cap for recoverable system loss was also ironed out with the
inputs of industry players taken into account. ‘The electric providers will also provide
certain incentives to reward its consumers and distribution utilities with system
losses way below the prevailing approved cap. A separate mechanism is also
provided on how to treat system loss reduction, Under this new provision, it will be

treated either as part of capital or operating costs of the distribution utilities.

The Filipino consumers will truly benefit and reap the fruits of this legislation. Let us
continue to push for the passage of legislative measures that will alleviate the plight

of our consumers.

In view of the foregoing, the support of the Members of Congress for the timely passage of this

measure is earnestly requested,

ea

XAVIER JESUS “XJ” D. ROMUALDO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS,
First Regular Session

2635

House Bill No.

INTRODUCED BY REPRESENTATIVE XAVIER JESUS “XJ” D, ROMUALDO

AN ACT
AMENDING REPUBLIC ACT NO. 7832, AS AMENDED, OTHERWISE KNOWN AS
‘THE ANTI-ELECTRICITY AND ELECTRIC TRANSMISSION LINES/MATERIALS
PILFERAGE ACT OF 1994

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

1 Section 1, Republic Act No. 7832, as amended, is hereby further amended to read as follows:

3 Section 1. Short Title. - This Act shall be referred to as the ANTI-ELECTRICITY,

4 E EQUIPMENT, AND MATERIALS PILFERAGE

LECTRIC POWER LIN

sf ACT OF 2013 [Antielectricity-and-Bleetrie-Fransmission-Lines/Materials-Pilferage
6 Act of 1994],
8 SECTION 2. DEFINITION OF TERMS. — AS USED IN THIS ACT, THE

9 FOLLOWING TERMS ARE HEREIN DEFINED AS FOLLOWS:

“TRIC POWER LINE, EQUIPMENT, OR MATERIAL” REFER TO

i) (A) “EL
12 FACILITIES, ASSETS, AND INFRASTRUCTURE USED IN ELECTRIC POWER
13 GENERATION, TRANSMISSION, AND DISTRIBUTION SUCH AS, BUT NOT

14 LIMITED TO, THE FOLLOWING:

16 (1) GENERATION, TRANSMISSION, AND DISTRIBUTION EQUIPMENT

Ee AND LINE STRUCTURES AND POLES OF ANY MAKE OR DESIGN;



(2) ALL TYPES OF WIRES AND CABLES USED TO GENERATE,
TRANSMIT AND DISTRIBUTE ELECTRICITY, INCLUDING THOSE
USED FOR GROUNDING, CONTROL, MEASUREMENT, AND

COMMUNICATION PURPOS!

(3) ALL OVERHEAD GROUND AND NEUTRAL WIRES DESIGNED TO

T ELECTRICAL CONDUCTORS FROM LIGHTNING STRIKES

PROT

AND PROVIDE VOLTAG)

TABIL]

(4) INSULATORS OF ANY OTHER MATERIAL USED TO ATTACH THE

. TOWERS OR POLE

ELECTRICAL CONDUCTORS FROM STE! ND

(5) G RATION, TRANSMISSION, AND DISTRIBUTION LINE

HARDWARE AND MATERIALS OF ANY MAKE OR KIND US FOR

‘THE DELIVERY OF ELECTRICITY,
SECTION 3 [Seetion-2]. Illegal Use of Electricity. — It is hereby declared unlawful

for any person, whether natural or juridical, public or private, to:

(a) Tap, make or cause to be made any connection with overhead lines, service drops,
or other electric service wires, without previous authority or consent of the private

electric utility or rural electric cooperative concerned;

(b) Tap, make, or cause to be made any connection to the existing electric service
facilities of any duly registered consumer without the CONSENT OR AUTHORITY
OF BOTH THE CONCERNED PRIVATE ELECTRIC UTILITY OR RURAL

“TRIC COOPERATIVE AND SUCH DULY REGISTERED CONSUMER



14

15

16

18

19

20

2

22

23

26

21

28

(©) Tamper, install, or use a tampered electrical meter, INSTRUMENT
TRANSFORMER AND ASSOCIATED EQUIPMENT, jumper, current reversing
transformer, shorting or shunting wire, loop connection, or any other device OR
ANY OTHER METHOD, which interferes with the proper or accurate registry or
metering of electric current or otherwise results in its diversion in a manner whereby

electricity is stolen or waster;

(a) Damage or destroy an clectric meter, equipment, wire or conduit or allow any of
them to be so damaged or destroyed as to interfere with the proper or accurate

metering of electric current; and

(©) Knowingly use o receive the direct benefit of electric service obtained through

any of the acts mentioned in subsections (a), (b), (c), and (d) above.

SECTION 4 [Section-3]. Theft OR DESTRUCTION OF ELECTRIC POWER
[Fransmission] Lines, EQUIPMENT, and Materials. — [(@)] It is hereby declared

unlawful for any person to:

(1) Cut, saw, slice, separate, split, severe, smelt, or remove any electric power LINE,
EQUIPMENT, OR MATERIAL [transmission-Hine/material-or-meter] from a tower,
pole, any other installation or place of installation, or any other place or site where it
may be rightfully or lawfully stored, deposited, kept, stocked, inventoried, situated,
or located, without the consent of the owner [;whether-ornet-the-aet is done for profit

orgain];

(2) Take, carry away, remove or transfer, with or without the use of a motor vehicle
or other means of conveyance, any electric power LINE, EQUIPMENT, OR

MATERIAL [transmissionline/material-er-meter] from a tower, pole, any other

installation or place of installation, or any place ot site where it may be rightfully or



8

9

lawfully stored, deposited, kept, stocked, inventoried, situated or located, without the

consent of the owner [;wheth the-aet-is-done for profi in];

(3) Store, possess, or otherwise keep in ONE’S [his] premises, custody, or control
any electric power LINE, EQUIPMENT, OR MATERIAL [transmission
Jine/matesial er meter] without the consent of the owner thereof [,whether- or not-the

actis done for profitor-gein]; and

(4) Load, carry, ship, or move from one place to another, whether by land, air or sea,
any electric power LINE, EQUIPMENT, OR MATERIAL [transmission
Jinefmaterial] [;-whether-er-not-the-aet-is-donefor-profit-or-gain,] without first

securing a clearance/permit for the said purpose from its owner [or-the-National

Power Corporation NPC) ots regional offi cd a-h ay-be]; AND

(5) DESTROY, DAMAGE, OR ATTEMPT TO DES

(ROY OR DAMAGE, BY

BOMB, EXPLOSIVE, OR ANY OTE ANY ELECTRIC

IR MEANS OR DE!

POWER LINE, EQUIPMENT, OR MATERIAL.

{(b)-For-purposes-of this-seetion, “electrical p snission-line/material’-refers

Steele ! donb phlventoae wae enesl beeen
’ E es
pee crea save Fi ieee
cary-and-supportthe conductors:

2 Atueni Sci wih iced (ESR) Gee exnensof on hemdred 00
MCM:

neha RE A A TE TT TI



millimeters—in-di and designedto_protect-the-electrieal_conduetorsfiom

lightning strikes:

Jy aokinjars wade of noree!: ‘nes-ehell anadesianed Lessee eloeacek
Mee eon Caer oneeenvecesoler a4

5}-Various-transmission Hine-hardwares-and-materials-made-of aluminum-alloy

alfeable-steel-and-designedto-intereonnect-th conductors, ground-wires;
and_insulators-mentioned-in-subparagraphs-(1),-(2),-@)--and-4)-above-for-the-safe

and-reliable-operation-of the transmissiontines:|

SECTION 5 [Seetion-4]. Prima Facie Evidence. = (a) The presence of any of the
following cireumstances shall constitute prima facie evidence of illegal use of
electricity, as defined in this Act, [by-the-person-benefited-thereby,] and shall be the
basis for: (1) the OUTRIGHT [immediate] disconnection by the electric utility OF
THE ELECTRIC SERVICE to such person [after-due-notiee] IMMEDIATELY
UPON THE DISCOVERY THEREOF TO PREVENT FURTHER PILFERAGE OR
LOSS OF ELECTRICITY AND FOR SAFETY PURPOSES, (2) the holding of a

preliminary investigation by the prosecutor and the subsequent filing in court of the

pertinent COMPLAINT OR information, and (3) the lifting of any temporary
restraining order or injunction which may have been issued against a private electric

utility or rural electric cooperative:

(i) The presence of a bored hole on the glass cover of the electric meter, or at

the back or any other part of said meter;

(ii) The presence inside the electric meter of salt, sugar and other elements that
could result in the inaccurate registration of the meter's internal parts to prevent

its accurate registration of consumption of electricity;



19

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(ii) The existence of any wiring connection which affects the normal operation

or registration of the electric meter;

(iv) The presence of a tampered, broken, or fake seal on the meter, or
mutilated, altered or tampered meter recording chart or graph, or computerized

chart, graph, or log;

(y) The presence in any part of the building or its premises which is subject to
the control of the consumer or on the electric meter, of a current reversing
transformer, jumper, shorting and/or shunting wire, and/or loop connection or

any other similar device;

(vi) The mutilation, alteration, reconnection, disconnection, bypassing or

tampering of instruments, transformers, and accessories;

(vii) The destruction of, or attempt to destroy, any integral accessory of the

metering device box which encases an electric meter, or its metering

accessories; [and]

(VII) THE P|

‘NCE OF A HOLE IN A CONDUIT WHICH CONTAINS

THE WIRES LEADING TO THE ELECTRIC METER [(iii)Fhe-aeceptanee

Jectric-utility- concemed-or the making-of sueh-an-offer to-any-sueh-officer-o

Reger ars eat enya arya as
ated—in—subp tii) Fi i}; 0r-(vii)| hereof
Provided;-however, That the-d any of the foreg 5
der-to-cons 5 fai ick > -be-personally—witnessed-and
dos OTe er ne oentol tae Lay or duly nan ne sopresnranee SEIN



(IX) THE PRESENCE OF ERROR OR ALARM CODES IN AN

El

‘TRONIC OR DIGITAL ELECTRIC METER INDICATING AN

UNAUTHORIZED MANIPULATION;

(X) THE PRESENCE OF A DISCREPANCY IN THE READINGS OF A

CONSUMER’S ME

[ER WITH A CHECK METER INSTALLED BY THE

ELECTRIC UTILITY; PROVIDED, THAT THE INSTALLATION OF THE

SUCH CHECK METER IS WITNESSED BY A DULY AUTHORIZED
REPRESENTATIVE OF THE ENERGY REGULATORY COMMISSION
(ERC), A PERSON IN AUTHORITY, OR AN AGENT OF PERSONS IN

AUTHORITY; AND

(XT) THE ACCEPTANCE OF MONEY AND/OR OTHER VALUABLE
CONSIDERATION BY ANY OFFICER OR EMPLOYEE OF THE
PRIVATE ELECTRIC UTILITY OR RURAL ELECTRIC COOPERATIVE
CONCERNED OR THE MAKING OF SUCH AN OFFER TO ANY SUCH
OFFICER OR EMPLOYEE FOR NOT REPORTING THE PRESENCE OF
ANY OF THE CIRCUMSTANCES ENUMERATED IN SUBPARAGRAPHS
@), UD, CM), (IV), (V), (VID, (VII), (IX), OR (X) HEREOF: PROVIDED,
HOWEVER, THAT THE DISCOVERY OF ANY OF THE FOREGOING

CIRCUMSTANCES, IN ORDER TO CONSTITUTE PRIMA FACIE

EVIDENCE, MUST BE PERSONALLY WITN!

TO BY A DULY AUTHORIZED REPRE:

ITATIVE OF THE ERC, A
PERSON IN AUTHORITY, OR AN AGENT OF PERSONS IN

AUTHORITY,

(b) The possession, control, or custody of an electric power LINE, EQUIPMENT,

OR MATERIAL [transmissientine/material] by any person, natural or juridical, not

engaged in the GENERATION [tansformation], transmission, or distribution of

TST SR a iON SES CNSR ae


electric power, or in the manufacture of such electric power LINE, EQUIPMENT,

ORM.

RIAL [transmission-tine/material] shall be prima facie evidence that such
is the fruit of the offense defined in Section 4 [3] hereof and, therefore, such LINE,
EQUIPMENT, OR MATERIAL [Hise/material] may be confiscated from the person

in possession, control, or custody thereof.

SECTION 6 [Seetion-S]. Incentives. ~ An incentive scheme by way of a monetary
reward in AN AMOUNT EQUIVALENT TO TWENTY PERCENT (20%) OF THE
VALUE OF THE RECOVERED STOLEN LINE, EQUIPMENT, OR MATERIAL
[the-minimum-amount-of Five-thousand-pesos-(P5,000:00)] shall be given to any
person who shall report to the ELECTRIC POWER PRODUCER OR
GENERATION COMPANY, TRANSMISSION COMPANY, PRIVATE

ELECTRIC UTILITY, RURAL ELECTRIC COOPERATIVE [NPG] or police

authorities any act which may constitute a violation of Section 4 [3] hereof. THE

INCENTIVE SCHE! SHALL ALSO BE MADE AVAILABLE TO PERSONS

WHO PARTICIPATE IN THE APPREHENSION AND/OR CONVICTION OF

PERSONS WHO VIOLATE THIS ACT.

‘The Department of Energy (DOE), in consultation with ELECTRIC POWER
PRODUCERS OR GENERATION COMPANIES, TRANSMISSION

COMPANIES.

PRIVATE ELECTRIC UTILITIES, RURAL ELECTRIC
COOPERATIVES, AND CONSUMERS, shall issue the necessary guidelines for the
proper implementation of this incentive scheme within thirty (30) days from the

effectivity of this Act.

SECTION 7. INSPECTION OF ELECTRIC SERVICE. - THE DULY
AUTHORIZED PERSONNEL OF PRIVATE ELECTRIC UTILITIES OR RURAL
ELECTRIC COOPERATIVES SHALL, AFTER PRESENTATION OF VALID
IDENTIFICATION CARDS AND INSPECTION REPORT FORMS, BE

ALLOWED ENTRY INTO THE PREMISES OF ANY DWELLING OR



25

BUILDING, INCLUDING COMMERCIAL AND GOVERNMENT

ESTABLISHMEN'

ts, TO CONDUCT AN INSPECTION OF ELECTRIC
SERVICE CONNECTIONS IN THE PRESENCE OF THE OWNER CONCERNED.
OR, IN HIS OR HER ABSENCE, TO BE WITNESSED BY A PERSON IN
AUTHORITY OR AN AGENT OF PERSONS IN AUTHORITY WITH
JURISDICTION OVER SUCH DWELLING, BUILDING, OR ESTABLISHMENT,
IN ORDER TO DETERMINE IF ANY VIOLATION OF THIS ACT IS BEING

COMMITTED.

SECTION 8 [Seetion-6]. Disconnection of Blecttic Service. ~ The private electric
utility or rural electric cooperative concerned shall have the right and authority to
disconnect [immediately] OUTRIGHT the electric service [after-serving-a-writien
notice or-warhing to-that-effeet] without the need of a court or administrative order,
and deny restoration of the same, [when-the-owner-of the-house-or establishment
egneerned] WHEN THE CUSTOMER or someone acting in his behalf shall have
been caught IN [en] flagrante delicto COMMITTING [doing] any of the acts
enumerated in Section 5(a) [4] hereof, or when [any-ef-the-vireumstanees—so

eee Pocket have beer as d-for th time: Provided That in-th

discovery] ANY PILFERING DEVICE OR SCHEME IS FOUND OR ATTACHED
10 THE ELECTRIC SERVICE CONNECTION OR IS BEING USED BY THE
CONSUMER AT THE TIME AN INSPECTION OF ELECTRIC SERVICE IS
BEING CONDUCTED: Provided, further, that the electric service [shall-net-be

diately di dor] shall NOT be [immediately] restored [upon] UNLESS

the CUSTOMER deposits {ef] the amount representing the differential billing [by-the
person—denied—the-service,] with the private electric utility or rural electric
cooperative concerned or with the competent court, as the case may be: Provided,
further[more], That if the court finds that illegal use of electricity has not been
committed by the same person, the amount deposited shall be credited against future

billings, with legal interest thereon chargeable against the private utility or rural



electric cooperative, and the utility or cooperative shall be made to immediately pay
such person double the value of the payment or deposit with legal interest, which
amount shall likewise be creditable against immediate future billings, without
prejudice to any criminal, civil or administrative action that, such person may be
entitled to file under existing laws, rules and regulations: Provided, finally, That if
the court finds the same person guilty of such illegal use of electricity, he OR SHE
shall, upon final judgment, be made to pay the electric utility or rural electric
cooperative concerned double the value of the estimated electricity illegally used

ection as differential billing.

which is referred to in this

For purposes of this Act, “differential billing” shall refer to the amount to be charged

to the person concemed for the unbilled electricity illegally consumed by him as

determined through the use of methodologies which utilize, among others, as bas
for determining the amount of monthly electric consumption in kilowatt-hours to be
billed, either: (1) the highest recorded monthly consumption within the [five-year]

‘THIRTY-MONTH billing period preceding the time of the discovery, (b) [the

estimated: monthly ption-as-per-the-report-of load-inspeetion-eonducted-d
the—time—of—diseovery] THE HIGHER CONSUMPTION BETWEEN THE

THE HIGHEST DRASTIC

AVERAGE CONSUMPTIONS BEFORE OR AF
DROP IN CONSUMPTION WITHIN THE THRITY-MONTH BILLING PERIOD
PRECEDING THE DISCOVERY, (c) [the-higher- consumption-between-the average
consumptions-before-or-after-the highest drastie-drop-in-eonsumption-within-the-five-
‘yearbilling—period—preceding—the—diseovery] THE ESTIMATED MONTHLY
CONSUMPTION AS PER THE REPORT OF LOAD INSPECTION CONDUCTED
DURING THE TIME OF DISCOVERY, [(4)-the-highest-reeorded—monthly

aption-within- four (4)-months-after the-time-of diseovery,-oF] AND [e] (d) the

result of the [ERB] ERC test during the time of discovery and, as basis for
determining the period to be recovered by the differential billing, either: (1) the time
when the electric service of the person concerned recorded an abrupt or abnormal

drop in consumption, or (2) when there was a change in his service connection [sue

LLL EL LLL LOL TT TE


as-a] OR a change [ef] IN meter, [change of seal-or reconneetion,] or in the absence
thereof, a maximum of [sixty-{60)] TWENTY-FOUR (24) billing months, up to the
time of discovery; Provided, however, That such period shall, in no case, be less than
one (1) year preceding the date of discovery of the illegal use of electricity
REGARDLESS OF ANY PRIOR CHANGE OF SEAL, METER OR SERVICE
CONNECTION, OR RECONNECTION OR INSPECTION OCCURING WITHIN

ONE (1) YEAR BEFORE THE DATE OF DISCOVERY OR APPREHENSION.

TION 9 [Seetion-]. Penalties. - ANY PERSON WHO IS FOUND TO HAVE

VIOLATED ANY PROVISION OF THIS ACT SHALL BE PUNISHED BY:

(A) THE PENALTY OF PRISION CORRECCIONAL IN ITS MAXIMUM

PERIOD TO PRISION MAYOR IN ITS MINIMUM PERIOD, IF 1 TOTAL,

XC)

ID ONE HUNDRED THOUSAND

AMOUNT INVOLVED DOES NO’

AL,

3S, OR A FIN

OF TWO (2) TIMES THE VALUE OF THE ILL

CTRICITY USAGE, OR BOTH.

AND

IN THE CASE OF THEFT OF ELECTRIC POWER LINES, EQUIPME]
MATERIALS, THE FINE SHALL BE FIVE (5) TIMES THE VALUE OF THE

MATERIALS UNLAWFULLY OR ILLEGALLY TAKEN.

(B) THE PENALTY OF PRISION MAYOR IN ITS MAXIMUM PERIOD TO
RECLUSION TEMPORAL, IF THE TOTAL AMOUNT INVOLVED IS AT
LEAST ONE HUNDRED THOUSAND PESOS BUT DOES NOT EXCEED FIVE
HUNDRED THOUSAND PESOS, OR A FINE OF THREE (3) TIMES THE

VALUE OF THE ILLEGAL ELECTRICITY USAGE, OR BOTH.
IN THE CASE OF THEFT OF ELECTRIC POWER LINES, EQUIPMENT AND
MATERIALS, THE APPLICABLE FINE IS SIX (6) TIMES THE VALUE OF THE

MATERIALS UNLAWFULLY OR ILLEGALLY TAKEN.

i pA SES AS IAP SIG TL EEE TR TE IE


v

(C) THE PENALTY OF RECLUSION TEMPORAL TO RECLUSION
PERPETUA, IF THE TOAL AMOUNT INVOLVED IS AT LEAST FIVE
HUNDRED THOUSAND PESOS, OR A FINE OF FIVE (5) TIMES THE VALUE

OF THE ILLEGAL ELECTRICITY USAGE, OR BOTH.

IN CASE OF THEFT OF ELECTRIC POWER LINES, EQUIPMENT AND
MATERIALS, THE APPLICABLE FINE IS TEN (10) TIMES THE VALUE OF

THE MATERIALS UNLAWFULLY OR ILLEGALLY TAKEN.

IF THE OFFENSE IS COMMITTED BY, OR IN CONNIVANCE WITH, AN

OFFICER OR EMPLOYEE OF THE PRIVATE ELECTRIC UTILITY OR RURAL,

‘CTRIC COOPERATIVE CONCERNED, SUCH OFFICER OR EMPLOYEE

SHALL PUNISHED WITH THE PENALTY OF IMPRISONMENT TWO (2)

DEGRE HIGHER THAN THE PENALTIES PROVIDED HEREIN AND

SHALL BE PERPETUALLY DISQUALIFIED FROM EMPLOYMENT IN ANY
PUBLIC OR PRIVATE UTILITY OR SERVICE COMPANY AND FROM

HOLDING ANY PUBLIC OFFICE,

IF THE OFFENDER IS A RECIDIVIST OR COMMITS MORE THAN TWO (2)
ACTS PROVIDED IN SECTIONS 3, 4, OR 5 OF THIS ACT, THE PENALTY

SHALL BE TWO (2) DEGREES HIGHER THAN THE IMPOSABLE PENALTY.

ik THE PRIVATE ELECTRIC UTILITY OR RURAL ELECTRIC
COOPERATIVE SHALL KNOWINGLY PERMIT OR HAVE KNOWLEDGE OF
THE COMMISSIONS OF THE ACTS PROVIDED IN SECTIONS 3, 4, OR 5 OF
THIS ACT AND SHALL HAVE FAILED TO PREVENT THE SAME OR IS
OTHERWISE GUILTY OF NEGLIGENCE IN CONNECTION WITH THE

COMMISSION THEREOF, IT SHALL BE MADE TO PAY A FINE NOT



2

EXCEEDING FIVE (5) TIMES THE AMOUNT OF THE “DIFFERENTIAL

BILLING”.

IF THE VIOLATION IS COMMITTED BY ANY JURIDICAL ENTITY, THE
PENALTY SHALL BE IMPOSED ON THE PRESIDENT, CHIEF EXECUTIVE
OFFICER, CHIEF OPERATIONS OFFICER, MANAGING PARTNER,
PARTNER, MANAGER, AND/OR SUCH OFFICERS, INCLUDING MEMBERS
OF THE BOARD, WHO SHALL HAVE KNOWINGLY PERMITTED, FAILED
TO PREVENT, OR WAS OTHERWISE RESPONSIBLE FOR THE

COMMISSION OF THE OFFENSE.

{(@) Vielation-of Section 2—Phe penalty-of prisi fihe-ranging-from-Fon
thousand peses-(P4-10,000,00)-te-Fwenty-thousand-pesos-(P\-20,000)-oF both att
diseretion-of the-eourt;-shall-be-imposed-on-any-p found-guilty-of violating
Section 2 hereof.

{by Vieltion of Seotion 3 The ponaliy-oFreclsion temporal ora-fine raging f
Fifly-thousand-peses-(\50,000)-to- One -hundred-thousand-peses-(P\100,000)-0F both;

at-the-diseretion-of-the-court,shall-be-imposed—on—any-person—found—guilty—of



1a itting-any-of th oe Sacked Hemee anseer heather acts:

eetrie—utiit d,~such-offi iployee-shall,-upon-eonvietion,—be

pnished-idh a ponalty-one-C)-degree-highor than the penalty provided thereia, and
forthwith-be-dismissed-and_perpetually-disqualified-from-employment-in-any-publie
+ private-utility-or serviee- company--Likewise, the -electrie-utility-coneemed-which
shall-have-knowingly-permitted-or having -knowledge-of #ts-commission-shall-have
failed to-prevent-the-same, or-was-otherwise-guilty-of-negligence-in-connection-with
the-commission-thereof;-shall-be-made-to-pay-«-fine not exeeeding-triple-the-amount

ofthe “differential-billing” subject-to-the-diseretion-of the ts:

i£-the-violation-is itted-by-a-partnership,-firm, corporation; assoeiati

other_legal-entity,including-a_government-ewned-or-—eontrolled-corporation, the
penalty-shall-be-impesed-on-the-president, manager-and-each-of the-officers-thereof
who-shall knowingly: permitted; failed-to-prevent or-was-otherwise-responsible-for the

commission-of the-offense:]

SECTION 10 [Seetion-8]. Authority to Impose Violation of Contract Surcharges. - A
private electric utility or rural electric cooperative may impose surcharges, in
addition to the value of the electricity pilfered, on the bills of any consumer
apprehended for tampering with his electric meter/metering facility installed on his
premises, as well as other violations of contract like direct connection, use of jumper,
and other means of illicit usage of electricity found installed in the premises of the
consumer. The surcharge for the violation of contract shall be collected from and

paid by the consumer concerned as follows:

(a) First apprehension. - Twenty five percent (25%) of the current bill as surcharge;



we

(b) Second apprehension. - Fifty percent (50%) of the eurrent bill as surcharge; and

(c) Third and subsequent apprehensions. - One hundred percent (100%) of the

current bill as surcharge,

‘The private electric utility or rural electric cooperative is authorized to discontinue
the electric service in case the consumer is in arrears in the payment of the above

imposed surcharges.

‘The term ‘apprehension’ as used herein shall be understood to mean the discovery of
the presence of any of the circumstances enumerated in Section 4 hereof in the

establishment or outfit of the consumer concerned.

SECTION 11 [Seetien-9]. Restriction on the Issuance of Restraining Orders or Writs
of Injunction, - No writ of injunction or restraining order shall be issued by any court

against any private electric utility or rural electric cooperative exercising the right

and authority to disconnect electric service PURSUANT TO SECTION 8 OF THIS

ACT: [asprovided—inthis—Act—unless—there—isprima—facie—evidenee—that—th
di i made—with-evidentbad—faith—orgraveabuse—ofauthority]

PROVIDED, THAT A COURT MAY ISSUE AN INJUNCTION OR
RESTRAINING ORDER UPON THE FILING OF A BOND WITH THE COURT,
WHICH SHALL BE IN THE FORM OF CASH OR CASHIER'S CHECK
EQUIVALENT TO THE "DIFFERENTIAL BILLING," PENALTIES, AND
OTHER CHARGES, OR TO THE TOTAL VALUE OF THE SUBJECT MATTER.
OF THE ACTION. HOWEVER, SUCH INJUNCTION OR RESTRAINING
ORDER SHALL NOT BE GRANTED OR, IF GRANTED, SHALL BE
DISSOLVED UPON FILING BY THE PRIVATE ELECTRIC UTILITY OR
RURAL ELECTRIC COOPERATIVE OF A COUNTERBOND IN THE SAME

FORM AND AMOUNT.

“ns a stent SEES rm


[H5-notwithstanding-the-provisions-of this-seot issues-an-injunetion-or

der, such infuncti ining-order-shall-be-effective-only-uponthe

filing-of a bond-with-th >-Whieh-shall-be-in-the form of eash-or-eashier's-cheek
1 differential billine ” penalks

i hed billing," penak -other-charges, he-total

restraining-order shall Hy-be-refused-or, if d-shall-be-dissolved-upon
Sling-by-the publio-wility-of iocet aieatter cass eased see akove.
required:—Provided,—finally,—That_wh ich-injun granted,the-o

ell, 10) -daye-f youbinite-rer ne cue
Court setting forth-in-deteilthe ground forlts onder]

SECTION 12. EXCLUSIVE JURISDICTION OF COURTS. — THE COURTS
SHALL HAVE ORIGINAL AND EXCLUSIVE JURISDICTION OVER ALL
DISPUTES AND CONTROVERSIES ARISING FROM THE EXERCISE OF THE
RIGHTS AND PREROGATIVES PROVIDED UNDER THIS ACT. NEITHER
THE ERC NOR THE NATIONAL ELECTRIFICATION ADMINISTRATION
(NEA) SHALL TAKE COGNIZANCE OF ANY COMPLAINT AGAINST A

PRIVATE RIC’ UTILITY OR RURAL ELECTRIC COOPERATIVE

E

EXERCISING ITS RIGHTS AND PREROGATIVES UNDER THIS ACT.

[Section 10-Rationalizai m-Lowses-by-Phasing-out-Pilferage-Lo. a
Component -—Fhere-is-hereby-established-a-eap-on-the-recoverable-rate-of

; 441/201 i
Ri d-ahalep 2%) at-the-end-of the first-year following



iy). Nine and-e-half-pereent-(9-172%) at the end-of the fourth year-following-the

ProvidedThat-the-FRB-is-hereby-authorized-to-determine-at-the end-of the-fourth

elfectivity-of the-new-eaps: Provided, further, That-in-the-ealeulation-oF th
ee ae ‘her-ontity-that-oupplies-power-direotly-to-a
not-be-counted-even-if-the-billing-for-the-said_power-used-is-through-the-private
clectric-utility:

3 is 1d-byN che itythe i is
tt power-sold-by NPC .at-supplies-power-direetly-to-a



TRANSMISSION AND DISTRIBUTION UTILITIES TAKING INTO ACCOUNT
SUCH TECHNICAL CONSIDERATIONS INCLUDING, BUT NOT LIMITED
TO, LOAD DENSITY, SALES MIX, COST OF SERVICE, DELIVERY
VOLTAGE, AS IT MAY DETERMINE, AS WELL AS THE VIABILITY OF THE
PRIVATE ELECTRIC UTILITIES AND ELECTRIC COOPERATIVES AND THE

INTERST OF THE CONSUMING PUBLIC.

THE MAXIMUM RATE OF SYSTEM LOSS THAT A DISTRIBUTION UTILITY
MAY PASS ON TO ITS CUSTOMERS SHALL BE THE ACTUAL BUT NOT

DING EIGHT AND ONE-HALF PERCENT (8.5%) OF THE TOTAL

EXC
KILOWATT-HOURS (KWH) GENERATED AND PURCHASED FOR PUBLIC
DISTRIBUTION UTILITIES AND THIRTEEN PERCENT (13%) FOR ELECTRIC

COOPERATIVES

iCs).

THE ACTUAL COMPANY USE NOT EXCEEDING ONE PERCENT (1%) OF
THE TOAL KWH GENERATED AND PURCHASED SHALL BE TREATED AS
FOLLOWING

AN EXPENSE OF DISTRIBUTION UTILITIES IN TH

MANNER:

(A) FOR PRIVATE DISTRIBUTION UTILITIES (PDUs) THAT ARE UNDER

PERFORMANCE-BASED REGULATION (PBR), IT SHALL BE TREATED AS

OPERATION AND MAINTENANCE EXPENSE IN ITS NEXT RESET;

(B) FOR PDUs THAT ARE NOT YET UNDER THE PBR, If SHALL BE
TREATED AS OPERATION AND MAINTENANCE EXPENSE | ITS PBR

APPLICATION; AND

(C) FOR ECs, IT SHALL BE ‘TREATED AS OPERATION AND MAINTENANCE

EXPENSE IN THE BENCHMARKING METHODOLOGY.


w

losses]

SECTION 13. RECOVERABLE SYSTEM LOSS CAPS. — THE ERC SHALL,
WITHIN ONE (1) YEAR FROM THE EFFECTIVITY OF THIS ACT,

DETERMINE THE RECOVERABLE SYSTEM LOSS CAPS OF ELECTRIC


ALL DUs and ECs SHALL SUBMIT TO THE ERC THROUGH A SWORN
STATEMENT THE RESULTS OF THEIR UPDATED SEGREGATED SYSTEM

LOSSES TOGETHER WITH THEIR ANNUAL REPORTS.

SECTION 14. SYSTEM LOSS REDUCTION PROGRAM AND INCENTIVES. —
THE ERC SHALL DEVELOP AN INCENTIVE MECHANISM TO REWARD.
CONSUMERS AND DISTRIBUTION UTILITIES WHOSE ACTUAL SYSTEM
LOSSES ARE BELOW THE PREVAILING APPROVED CAPS. THE
INCENTIVE MECHANISM SO ADOPTED MAY BE INCORPORATED BY THE
ERC IN THE PERFORMANCE INCENTIVE SCHEME (PIS) UNDER THE PBR
FOR PDUs AND IN THE BENCHMARKING METHODOLOGY FOR ECs.
TOWARDS THIS END, EXPENSES ASSOCIATED WITH. ANY SYSTEM LOSS
REDUCTION PROGRAM DULY APPROVED BY THE BRC SHALL BE
CONSIDERED PART OF THE CAPITAL OR OPERATING COSTS OF THE

DISTRIBUTION UTILITIES.

SECTION 15 [Section 14]. Area of Coverage. - The caps provided in Section 13 [40]
of this Act shall apply only to the area of coverage of private electric utilities and

rural electric cooperatives as of the date of the effectivity of ‘this Act.

[Fhe-permissible tevels-of for-system-losses-i fF eoveruge-that-may:
be-added-on-by either « private electric-utility of 2 rural-electrie-cooperative-shall-be
determined by the ERB]

SECTION 16 [Section 12]. Recovery of Pilferage Losses. - Any private electric
utility or rural electric cooperative which recovers any amount of pilferage losses
shall, within thirty (30) days from said recovery, report in writing and under oath to
the ERC [ERB}: (a) the fact of recovery, (b) the date thereof; (c) the name of the
‘consumer concemed, (d) the amount recovered, (e) the amount of pilferage loss
claimed, (£) the explanation for the failure to recover the whole amount claimed, and

(@) such other particulars as may be required by the ERC [ERB]. If there is a case


ALL DUs and ECs SHALL SUBMIT TO THE ERC THROUGH A SWORN

.TEMENT THE RESULTS OF THEIR UPDATED SEGREGATED SYSTEM

LOSSES TOGETHER WITH THEIR ANNUAL REPORTS.

SECTION 14. SYSTEM LOSS REDUCTION PROGRAM AND INCENTIVES. —
THE ERC SHALL DEVELOP AN INCENTIVE MECHANISM TO REWARD
CONSUMERS AND DISTRIBUTION UTILITIES WHOSE ACTUAL SYSTEM
LOSSES ARE BELOW THE PREVAILING APPROVED CAPS. THE
INCENTIVE MECHANISM SO ADOPTED MAY BE INCORPORATED BY THE
ERC IN THE PERFORMANCE INCENTIVE SCHEME (PIS) UNDER THE PBR
FOR PDUs AND IN THE BENCHMARKING METHODOLOGY FOR ECs.

TOWARDS THIS END, EXPENSES ASSOCIATED WITH ANY SYSTEM LOSS

REDUCTION PROGRAM DULY APPROVED BY THE ERC SHALL BE
CONSIDERED PART OF THE CAPITAL OR OPERATING COSTS OF THE

DISTRIBUTION UTILITIES.

SECTION 15 [Seetion-H1]. Area of Coverage. - The caps provided in Section 13 [40]
of this Act shall apply only to the area of coverage of private electric utilities and

rural electric cooperatives as of the date of the effectivity of this Act.

[[Fhe permissible levels-of recovery-for-system_losses-in-areas-of coverage that
be-added-on-by-cither-« private electric utili J-electric-eooperative-shall-be
determined by the ERB:]

SECTION 16 [Seetion-12]. Recovery of Pilferage Losses. - Any private electric
utility or rural electric cooperative which recovers any amount of pilferage losses
shall, within thirty (30) days from said recovery, report in writing and under oath to
the ERC [ERB}: (a) the fact of recovery, (b) the date thereof; (¢) the name of the
consumer concemed, (d) the amount recovered, (¢) the amount of pilferage loss
claimed, (f the explanation for the failure to recover the whole amount claimed, and

(g) such other particulars as may be required by the ERC [ERB]. If there is a case


28
29.

30

pending in court for the recovery of a pilferage loss, no private electric utility or rural
electric cooperative shall accept payment from the consumer unless so provided in a

compromise agreement duly executed by the parties and approved by the court.

SECTION 17 [Section—13]. Information Dissemination, - The private electric
Utilities, the rural clectric cooperatives, the NPC, and the NEA [National
BlectiGeation—Administration(NEA)] shall, in cooperation with each other,
undertake a vigorous campaign to inform their consumers of the provisions of this
‘Act especially Sections 3, 4, 5, 6, 7, 8, 9, AND 10 [2-3-4-5;-6-7and-8] hereof,
within sixty (60) days from the effectivity of this Act and at least once a year
thereafter, and to incorporate a faithful condensation of said provisions in the

contracts with new consumers.

SECTION 18 [Seetion-4]. Rules and Regulations. - The ERC [ERB] shall, within
thirty (30) working days after the conduct of due hearings which must commence
Within thirty (30) working days upon the effectivity of this Act, issue the rules and
regulations as may be necessary to ensure the efficient and effective implementation
of the provisions of this Act, to include but not limited to, the development of
inethodologies for computing the amount of electricity illegally used and the amount
Of payment or deposit contemplated in Section 9 [7] hereof, as a result of the

presence of the prima facie evidence discovered.

‘The ERC [ERB] shall, within the same period, also issue rules and regulations on the
submission of the reports required under Section 16 [42] hereof and the procedure for

the distribution to or crediting of consumers for recovered pilferage losses.

SECTION 19 [Seetion-15]. Separability Clause. - Any portion or provision of this
‘Act which may be declared unconstitutional or invalid shall not have the effect of

nullifying other portions or provisions hereof.


SECTION 20 [Section-16]. Repealing Clause. - The provisions in Presidential
Decree No. 401, as amended by Batas Pambansa Blg. 876, penalizing the
unauthorized installation of electrical connections, tampering and/or knowing use of
tampered electrical meters or other devices, and the theft of electricity are hereby
expressly repealed. All other laws, ordinances, rules, regulations, and other issuances
or parts thereof, which are inconsistent with this Act, are hereby repealed or modified

accordingly.

SECTION 21 [Seetion47]. Effectivity Clause. - This Act shall take effect thirty (30)
days after its publication in the Official Gazette or in any two (2) national

newspapers of general circulation,

Section 2, Implementing Rules and Regulations. ~ The Energy Regulatory Commission shall,
within sixty (60) days following the effectivity of this Act, in consultation with the National
Transmission Corporation or its concessionaire, distribution utilities, electric cooperatives,
generation companies, and consumers, promulgate new rules and regulations for the effective

implementation of Republic Act No. 7832, as amended by this Act.

Section 3. Separability Clause. — If any provision of this Act is declared unconstitutional or
invalid, the other parts or provisions hereof which are not affected thereby shall continue to be in

full force and effect.
Section 4. Repealing Clause. — All laws, decrees, executive orders, or rules and regulations
contrary to or inconsistent with the provisions of this Act are hereby repealed or modified

accordingly.

Section 5. Effectivity. — This Act shall take effect fifteen (15) days after its publication in two (2)

newspapers of general circulation.

‘Approved,