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Republic of the Philippines
HOUSE OF REPRESENTATIVE!
Quezon City, Metro Manila

BY:

SEVENTEENTH CONGRESS

REISTRATION UNIT
First. Regular Session ' \ AND INDEX SERVIC!
SS

House Bill No, 2190

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 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. 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 eamestly requested
L_— Pee

XAVIER JESUS D. ROMUALDO


EOE

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

SEVENTEENTH CONGRESS
First Regular Session

2190

House Bill No.

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;


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(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.

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, 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
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


1 reconnection or inspection occurring within one (1) year before the date of

2 discovery or apprehension.
x

4 SEC. 3. illegal Use of Electricity. — It shall be unlawful for any person to:

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6 a. Tap, make, or cause to be made any connection with overhead lines, service
7 drops, or other electric service wires, without previous authority or consent of
8 the private electric utility (PEU) or rural electric cooperative (REC) concerned
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10 b. Tap, make, or cause to be made any connection to the existing electric

ul service facilities of any duly registered consumer without the consent or

12 authority of both the concerned PEU or REC and such duly registered
13 consumer.

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15 c. Tamper, install, or use a tampered electrical meter, instrument transformer
16 and associated equipment, jumper, current reversing transformer, shorting or
17 shunting wire, loop connection, or any other device or any other method,
18 which interferes with the proper or accurate registry or metering of electric
19 current or otherwise results in its diversion in a manner whereby electricity is
20 stolen or wasted

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22 d. Damage or destroy an electric meter, equipment, wire, or conduit or allow any
23 of them to be so damaged or destroyed as to interfere with the proper or
24 accurate metering of electric current.

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26 e. Knowingly use or receive the direct benefit of electric service obtained
27 through any of the abovementioned acts.

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29 SEC. 4. Theft or Destruction of Electric Power Line, Equipment, or Material. — It shall

30 be unlawful for any person to:


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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:


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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.

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

registration of the electric meter.

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

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.

The mutilation, alteration, reconnection, disconnection, bypassing, or tampering

of instruments, transformers, and accessories.

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

device box that encases an electric meter, or its metering accessories.

The presence of a hole in a conduit that contains the wires leading to the electric

meter.

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

indicating an unauthorized manipulation.


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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.

14. 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

The Department of Energy (DOE), in consultation with electric power producers or

generation companies, transmission companies, private electric utilities, rural electric


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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


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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 (P100,000.00), 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
(P500,000.00), the penalty shall be prision mayor in its maximum period to
rectusion 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 reciusion 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.


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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 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.


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c. 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.


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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
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
under the performance-based regulation for private distribution utilities and in the

benchmarking methodology for electric cooperatives. Towards this end, expenses


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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
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,