Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 0414

INTRODUCED BY REPRESENTATIVE XAVIER JESUS 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
stakeholders, ironed out the issues and concems 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. This was re-filed in
the 15" Congress but was unfortunately not passed. It was likewise filed in the 16" Congress and
again was not passed.

‘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 concern 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
description of the true intent of the legislature. This will avoid what we call executive
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 passage of this measure

is earnestly requested.

XAVIER JESUS D. ROMUALDO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
EIGTHTEENTH CONGRESS
First Regular Session

House Bill No. o4l4

INTRODUCED BY REPRESENTATIVE XAVIER JESUS D. 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 may be cited 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, and 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 and materials of any make or
kind used for the delivery 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
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 inspection 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, cither: 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 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 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
lectric 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 concemed PEU or
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
accurate registry 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
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.

d. Load, carry, ship, or move from one place to another, whether by land, air or sea, any electric
power line, equipment, or material without first securing a clearance or permit for the said
purpose from its owner.

e. Destroy, damage, or attempt to destroy or damage, by bombs, explosives, or any other means
or device, any electric 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 disconnection 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 injunction 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.

2. The presence inside the electric meter of salt, sugar, and other material that could result in the
inaccurate registration of the meter's intemal 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 accessories.

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 the 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 concemed 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.

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 in 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 in flagrante 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 representing 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
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 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.

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
(100,000.00), the penalty shall be prision correccional in its maximum period to prision
‘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 (500,000.00), 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
permitied, 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
known as the Anti-Electricity and Electric Transmission Lines/Materials Pilferage 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.


¢. Third and subsequent apprehensions - One hundred 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, penalties, 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.

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
‘Administration (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.

All distribution utilities and electric cooperatives shall submit to the ERC, through a swom
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 under 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
cffectivity 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 unconstitutional or
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,