Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session
House Bill No. __ 799

INTRODUCED BY REPRESENTATIVE JURDIN JESUS M. ROMUALDO

EXPLANATORY NOTE

This is a refiled bill from the 19" Congress which originated from the late
Representative Pedro P. Romualdo which originally filed a version of this bill in
the 14th and 15th Congresses. In the 14th Congress, the Committee on Energy
deliberated upon this bill exhaustively. During the 14th Congress the bill was
passed on Third Reading and was transmitted to the Senate on September 24

2009 but failed to be acted by the Senate. This was refiled again in the 15"

16th, 17th and 18th Congresses by Representative Xavier Jesus D. Romualdo
and again was not passed.

Last Congress, a technical working group, with the participation of electric power
industry 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. It remained with the Committee
on Energy for final reporting out by the Technical Working Group.

Portions of the Explanatory Note of the late Representative Romualdo is herein
reproduced and updated to reflect new policies.

“Republic Act (RA) No. 7832 was passed into law in 1994 during the 9th
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 three
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. (Emphasis and updating supplied)

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 concern f
government, the industry players and the general consumers due to its impact
on the total cost of electricity on their monthly basic needs budget.

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 description of the true intent of the legislature. This will avoid what we call
executive or judicial legislation in the interpretation of the law.

Through the years, the Department of Energy has already come up with updated
policies to assist consumers with the issuance and implementation of the Magna
Carta for Residential Electricity Consumers and the issue on the maximum cap
for the recoverable system loss. The electric providers also provided certain
incentives to reward its consumers and distribution utilities with system losses
way below the prevailing approved cap. A separate mechanism was also
provided on how to treat system loss reduction. (Updates supplied)

Still, even when certain safeguards are in place the violations are very rampant
nationwide and people tend to ignore the existence of a law that will go after
them. Many nefarious individuals are unmindful of their illegal acts which directly
affects the reliability of the power supply. The abrupt power interruptions and
long power outages due to pilferage activities are perceived to amount to
millions of losses and consumers are pressed to spend more for alternative
sources of power to sustain their businesses and important activities especially
hospital institutions and manufacturing firms thus aggravating their budgets
(Updates supplied)

The Filipino consumers will truly benefit and reap the fruits of this updated
legisiation. 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
passage of this measure is earnestly requested.

JURDI M. ROMUALDO


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

TWENTIETH CONGRESS
First Regular Session
HOUSE BILL No. _759

INTRODUCED BY REPRESENTATIVE JURDIN JESUS M. ROMUALDO

AN ACT
PENALIZING THE ILLEGAL USE OF ELECTRICITY, THE THEFT AND
DESTRUCTION OF ELECTRIC POWER LINES, EQUIPMENT, AND MATERIALS,
RATIONALIZING SYSTEM LOSS, REPEALING REPUBLIC ACT NO. 7832,
OTHERWISE KNOWN AS THE ANTI-ELECTRICITY AND ELECTRIC
TRANSMISSION LINES/MATERIALS PILFERAGE ACT OF 1994, AND FOR OTHER
PURPOSES

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

assembled:

SECTION 1. Short Title. - This Act shall be known and as the “Anti-Electricity, Electric Power
Lines, Equipment, and Materials Pilferage Act”.
SEC. 2. Definitions. - As used in this Act, the following terms are hereby defined as follows

a. Electric power line, equipment, or material - refer to facilities, assets, and infrastructure used

in electric power generation, transmission, and distribution such as, but not limited to:

(1) Generation, transmission, and distribution equipment 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, und communication purposes;

(3) All overhead ground and neutral wires designed to protect electrical conductors from
lightning strikes and provide voltage stability;
(4) Insulators of any other material used to attach the electrical conductors from steel towers
or poles; and
(5) Generation, transmission, and distribution line hardware ind material, of any make or
kind used for the delively of electricity.
b. Differential billing - refers to the amount to be charged to the person concerned for the

unbilled electricity illegally consumed by him or her as determined through the use of

methodologies which utilize, among others, as basis for determining the amount of monthly


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electric consumption in kilowatt-hours to be billed, either: the highest recorded monthly

consumption within the thirty (30) month billing period preceding the time of the discovery,
the higher consumption between the average consumptions before or after the highest drastic
drop in consumption within the thirty (30) month billing period preceding the discovery, the
estimated monthly consumption as per the report of load inspec6on conducted during the
time of discovery, and the result of the Energy Regulatory Commission (ERC) test during the
time of discovery and, as basis for determining the period to be recovered by the differential
billing, either: the time when the electric service of the person concerned recorded an abrupt
or abnormal drop in consumption, or when there was a change in his service connection or a
change in meter, or in the absence thereof, a maximum of twenty-four (24) billing months, up
to the time of discovely; 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 occurring

within one (1) year before the date of discovery or apprehension

SEC. 3. Illegal Use of Electricity. -It shall be unlawful for any person 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

(PEU) or rural electric cooperative (REC) 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 PEU

and REC and such duly registered consumer.

c. 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

ccurate registly or metering of electric current or otherwise results in its diversion in a

manner whereby electricity is stolen or wasted.

d, Damage or destroy an electric 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.

e. Knowingly use or receive the direct benefit of electric service obtained through any of the

abovementioned acts.

SEC. 4. Theft or Destruction of Electric Power Line, Equipment, or Material, - It shall be

unlawful for any person to:

a. Cut, saw, slice, separate, split, severe, smelt, or remove any electric power line, equipment,
or material 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.

b. Take, carry away, remove, or transfer any electric power line, equipment, or material from a


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tower, pole, any other installation or place of installation, or any place or site where it may be
rightfully or lawfully stored, deposited, kept, stocked, inventoried, situated or located,

without the consent of the owner.

c. Store, possess, or otherwise keep in one's premises, custody, or control any electric power

line, equipment, or material without the consent of the owner thereof.

. Load, carry, ship, or move from one place to another, whether by land, air or sea, any electric

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power line, equipment, or material without fast seeming a clearance or permit for the

purpose from its owner.3

Destroy, damage, or attempt to destroy or damage, by bombs, explosives, or any other means

or device, any electri power line, equipment, or material,

SEC. 5. Prima Facie Evidence. - (a) The presence of any of the following circumstances shall
constitute prima facie evidence of the commission of illegal use of electricity and shall be the
basis for the outright discom lection of electric service immediately upon the discovery thereof to
prevent further pilferage or loss of electricity and for safety purposes, the institution of criminal
action, and the lifting of any temporary restraining order or il ljunction which may have been

issued against the PEU or REC concerned:

1. 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.

The presence inside the electric meter of salt, sugar, and other material that could result
in the inaccurate registration of the meter's internal parts to prevent its accurate

registration of consumption of electricity.

3. The existence of any wiring connection that affects the normal operation or registration

of the electric meter.

4. 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,

5. 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.

6. The mutilation, alteration, reconnection, disconnection, bypassing, or tampering of

instruments, transformers, and accessories.

7. The destruction of, or attempt to destroy, any integral accessory of the metering device

box that encases an electric meter, or its metering accesso
8. The presence of a hole in a conduit that contains the wires leading to the electric meter.

9. The presence of error or alarm codes in an electronic or digital electric meter indicating

an unauthorized manipulation.

10, The presence of a discrepancy in the readings of a consumer's meter with a check meter


installed by the electric utility; Provided, that the installation of such check meter is
witnessed by a duly authorized representative of the ERC. a person in authority, or an

agent of a person in authority.

11. The acceptance of money or other valuable consideration by any officer or employee of
the PEU or REC concerned or the making of such an offer to any such officer or
employee for not reporting the presence of any of the abovementioned circumstances;
Provided, however, that the discovery of any of the foregoing circumstances, in order to
constitute prima facie evidence, must be personally witnessed by and attested to by a duly
authorized representative of the ERC, a person in authority, or an agent of a person in

authority.

(b) The possession, control, or custody of an electric power line, equipment, or material by any

person, natural or juridical, not engaged in the generation, transmission, or distribution of electric
power, or in the manufacture of such electric power line, equipment, or material shall be prima
‘facie evidence that such is the fruit of the offense defined in Section 4 hereof. Thus, such electric
power line, equipment, or material may be confiscated from the person in possession, control, or

custody thereof.

SEC. 6. Incentive Scheme. - 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 shall be given to any person who shall report to the electric power producer or
generation company, transmission company, PEU, REC, police or other law enforcement
authority any act which constitutes an offense under Section 4 of this Act. The incentive scheme
shall also be made available to persons who participate in the apprehension or conviction of

persons who violate this Act.


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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 promulgate the necessary rules and regulations for the effective implementation

of this incentive scheme within sixty (60) days from the effectivity of this Act.

SEC. 7. Inspection of Electric Service. ‘- Duly authorized personnel of PEUs or RECs shall, after
presentation of valid identification cards and inspection report forms, be allowed entry into the
premises of any dwelling or building, including commercial and government establishments, 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 ul authority or an agent of a person in
authority with jurisdiction over such dwelling, building, or establishment, in order to determine if

any violation of this act is being committed,

SEC. 8. Disconnection of Electric Service. -The PEU or REC concerned shall have the right and
authority to disconnect outright electric service without the need of a court or administrative
order, and deny restoration of the same, when the customer or someone acting in his behalf shall
have been caught inflagrante delicto committing any of the acts enumerated in Section 5(a)
hereof, or when any pilfering device or scheme is found or attached to the electric service
connection or is being used by the consumer at the time an inspection of electric service is being
conducted; Provided, that the electric service shall not be restored unless the customer deposits
the amount representulg the differential billing with the PEU or REC concerned or with the
competent court, as the case may be; Provided, further, that if the court finds that illegal use of
electricity was not committed by the same person, the amount deposited shall be credited against
filhrre 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

tion that such person may file under existing laws, rules, and regulations; Provided, finally,

that if the court finds the same person guilty of 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 differential billing.


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SEC. 9. Penalties. - The following penalties shall be imposed upon those found to have violated
this Act:

a. Where the total amount involved does not exceed One Hundred thousand Pesos
(P100,000.00), the penalty shall be prision correccional in its maximum period to prison
mayor in its minimum period or a fine of twice the value of the illegal electricity usage, or
both. In the case of theft or destruction of electric power lines. equipment. or materials, the

fine shall be five (5) times the value of the line, equipment, or material taken or destroyed.

b. Where the total amount involved is more than One Hundred Thousand Pesos (P100.000.00)
but does not exceed Five Hundred Thousand Pesos (P500,000.00), the penalty shall be
prision mayor in its maximum period to reclusion temporal or a fine of thrice the value of the
illegal electricity usage, or both. In the case of theft or destruction of electric power lines,
equipment, and materials, the fine shall be six (6) times the value of the line, equipment, or

material taken or destroyed.

c. Where the total amount involved is more than Five Hundred Thousand. Pesos (P500,000.00),
the penalty shall be reclusion temporal to reclusion perpetua or a fine of five (5) times the
value of the illegal electricity usage, or both. In the case of theft or destruction of electric
power lines, equipment, and materials, the applicable fine shall be ten (10) times the value of

the line, equipment, or material taken or destroyed.

If the offense is committed by a juridical entity, the penalty shall be imposed on the president,
officer, director, board member, partner, manager, or other officer or employee who knowingly
permitted, knowingly failed to prevent, or was otherwise responsible for the commission of the

offense.

If the offense is committed by, or in connivance with, an officer or employee of the PEU or REU
concerned, such officer or employee shall be punished with the penalty of imprisonment two (2)
degrees higher than the penalties provided herein and shall be perpetually disqualified from
employment in any PEU or REC and from holding any public office.

If the offender has been previously convicted for violating Republic Act No. 7832, otherwise


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known as the Anti-Electricity and Electric Transmission Lines/Materials Pifferage Act of 1994,
or for violating this Act, or has committed more than two (2) of the unlawful acts enumerated in
Sections 3 and 4 of this Act, he or she shall punished with the penalty of imprisonment two (2)
degrees higher than the penalties provided herein.

SEC. 10. Authority to Impose Violation of Contract Surcharges. - A PEU or REC 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 or metering facility installed on his or her
premises, as well as other violations of contract, such as 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.
b. Second apprehension - Fifty percent (50%) of the current bill as surcharge.

c. Third and subsequent apprehensions - One bmIdred percent (100%) of the current bill as

surcharge.

The PEU or REC is authorized to discontinue the electric service in case the consumer is

in arrears in the payment of the surcharges.

SEC. 11, Restriction on the Issuance of Temporary Restraining Orders or Writs of Preliminary
Injunction. - No temporary restraining order (TRO) or writ of preliminary injunction shall be
issued by any court against any PEU or REC exercising the right and authority to disconnect
electric service pursuant to Section 8 of this Act; Provided, that a TRO or writ of preliminary
injunction may be issued 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, penaltics, and other charges, or to the
total value of the subject matter of the action; Provided, however, that such TRO or writ of
preliminary injunction shall not be issued or, if already issued, shall be dissolved upon the filing
by the PEU or REC with the court of a counter bond in the same form and amount.


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SEC. 12. Exclusive Jurisdiction of Courts. - The Regional Trial Court 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
Adi

ration (NEA) shall take cognizance of any complaint or action against a PEU or REC

exercising its rights under this act.

SEC. 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 transmission and
distribution utilities taking into account technical considerations, such as load density, sales mix,
cost of service, delivery voltage, as well as the viability of PEUs and RECs and the interest of the

consuming public.

The maximum rate of system loss that a distribution utility may pass on to its customers shall be
the actual system loss but not exceeding eight and one-half percent (8.5%) of the total kilowatt-
hours (kWh) generated and purchased for public distribution utilities and thirteen percent (13%)

for electric cooperatives.

The actual company use not exceeding one percent (1%) of the total kWh generated and

purchased shall be treated as an expense of distribution utilities in the following manner:

a. For private distribution utilities that are under performance-based regulation, it shall be

treated as operation and maintenance expense on its next reset.

b. For private distribution utilities that are not yet under performance-based regulation, it shall
be treated as operation and maintenance expense on its performance-based regulation
application.

c. For electric cooperatives, it shall be treated as operation and maintenance expense in the

benchmarking methodology.

Alll distribution utilities and electric cooperatives shall submit to the ERC, through a sworn
statement, the results of their updated segregated system losses together with their annual

reports.


SEC. 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 wider the performance-based regulation for private
distribution utilities and in the benchmarking methodology for electric cooperatives. 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 distribution utilities.

SEC. 15. Area of Coverage. - The caps provided in Section 13 of this Act shall apply only to the
area of coverage of PEUs and RECS as of the date of the effectivity of this Act.

SEC. 16. Recovery of Pilferage Losses. - Any PEU or REC which recovers any amount of
pilferage losses shall, within thirty (30) days from said recovery, report in writing and under oath
to the ERC the fact of recovery, the date thereof, the name of the consumer concerned, the
amount recovered, 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. If there is
a case pending in court for the recovery of a pilferage loss, no PEU or REC shall accept payment
from the consumer unless so provided in a compromise agreement duly executed by the parties

and approved by the court.

SEC. 17. Information Dissemination. - PEUs, RECS, the ERC, and the NEA shall, in cooperation
with each other, undertake a vigorous campaign to inform consumers of the provisions of this
Act. PEUs and RECs shall incorporate a faithful condensation of the provisions of this Act in its

contracts with new consumers.

SEC. 18. Implementing Rules and Regulations. - The ERC shall, within sixty (60) days from the
effectivity of this Act, after consultation with the National Transmission Corporation or its
concessionaire, distribution utilities, electric cooperatives, generation companies, and consumers,

promulgate the rules and regulations for the effective implementation of this Act.

SEC. 19. Separability Clause. - If any provision of this Act is declared wIconstitutional or


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invalid, the other parts or provisions hereof which are not affected thereby shall continue to be in

full force and effect.

SEC. 20. Repealing Clause. - Republic Act No. 7832, otherwise known as the Anti-Electricity
and Electric Transmission Lines/Materials Pilferage Act of 1994, is hereby repealed. All other
laws, decrees, executive orders and issuances, rules and regulations, and other issuances, or parts
thereof, that are inconsistent with the provisions of this Act are hereby repealed or modified

accordingly.

SEC. 21. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in

the Official Gazette or in a newspaper of general circulation.

Approved,