14'h Congress of the Republic ) 
of the Philippines 
) 
1st Regular Session 
1 
Introduced by Senator Aquilino Q. Pimentel, Jr. 
Explanatory Note 
This bill seeks to amend section 10 of Republic 7832, otherwise known as 
"An Act Penalizing the Pilferage of Electricity and Theft of Power Transmission 
LinedMaterials, Rationalizing System Losses by Phasing out Pilferage Losses as 
Component thereof, and for other purposes". 
The increasing electricity rates of private electric utilities and rural electric 
cooperatives nowadays have already reached monumental heights. One of the 
reasons why these rates show no sign of ever decreasing is the fact that these 
power utilities are passing the burden of the so-called systems losses on to 
consumers. 
It is unfair to pass such burden to the consumers of electricity. 
Why, in heaven's name should consumers who are not responsible for the 
systems losses -whether man-made or mechanically-caused - be made to pay 
for the losses? 
If the power firms make money, they keep it as profits. If they lose, they 
charge their losses to their customers! That's not free enterprise at all. That's 
fooling the people twice over because we are even told that the payments for 
systems losses are subjected to VAT fees, too, that we have to bear. 
These losses are the losses of the electric utilities. As members of an 
income-generating industry, these utilities should bear these losses exclusively. 
Moreover, a huge percentage of the population live under the poverty line, 
and with increasing power rates, coupled with the recent shortages in rice 
distribution, the poor can hardly cope even with ordinary daily expenses. 
In view of the foregoing, the passage of this bill is earnestly requested. 
- 
AQUlLlNO Q. PIMENTEL, JR. 


14'h Congress of the Republic ) 
of the Philippines 
) 
1' Regular Session 
) 
Introduced by Senator Aquilino Q. Pimentel, Jr. 
AN ACT AMENDING SECTION 10 OF REPUBLIC ACT 7832 
OTHERWISE KNOWN AS AN ACT PENALIZING THE PILFERAGE OF 
RATIONALIZmING SYSTEM LOSSES BY PHASING OUT PILFERAGE 
AND THEFT OF POWER TRANSMISSION LINESIMATERIALS, 
A COMPONENT THEREOF, AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1, Section 10 of Article 7832 is hereby amended as follows: 
[Rationalizafion of System Losses by Phasing out Pilferage Losses as a 
Component Thereof. -There is hereby established a cap on the recoverable rate 
of system losses as follows: 
(a) 
For private electric utilities: 
(i) 
(ii) 
(iii) 
(iv) 
Fourteen and a half percent (14 %%) at the end of the first year 
following the effectivity of this Act; 
Thirteen and one-fourth (13 %%) at the end of the second year 
following the effectivity of this Act; 
Eleven and three-fourths percent (11 %YO) at the end of the third 
year following the effectivity of this Act; and 
Nine and a half percent (9 %YO) at the end of the fourth year 
following the effectivity of this Act. 
Provided, That the ERE is hereby authorized to determine at the end of 
the fourth year following the effectivity of this Act, and as often as may be 
necessary taking into account the viability of private electric utilities and the 
interest of the consumers, whether the caps herein or theretofore established 
shall be reduced further, which shall, in no case, be lower than nine percent (9%) 
and accordingly fix the date of the effectivity of the new caps: Provided further, 
That in the calculation of system loss, power sold by NPC or any other entity that 
supplies power directly to the consumer and not through the distribution system 
of the private electric utility shall not be counted even if the billing for the said 
power is used through the private electric utility. 
The term "power sold by NPC or any other entity that supplies electricity 
directly to a consumer" as used in the preceding paragraph shall for purposes of 
this section be deemed to be sale directly to the consumer if: (I) 
the point of 
metering by the NPC or any other utility is less than one thousand (1,000) meters 
form the consumer, or (2) the consumer's electric consumption is three percent 
(3%) or more of the total load consumption of all the customers of the utility, or 
(3) there is no other consumer connected to the distribution line of the utility 
which connects to the NPC or any other utility point of metering to the consuming 
meter. 


(b) 
For rural electric cooperatives: 
(i) 
Twenty-two percent (22%) at the end of the first year following the 
effectivity of this Act; 
(ii) 
Twenty percent (20%) at the end of the second year following the 
effectivity of this Act; 
(iii) 
Eighteen percent (18%) at the end of the third year following the 
effectivity of this Act; 
(iv) 
Sixteen percent (16%) at the end of the fourth year following the 
effectivity of this Act; and 
(v) 
Fourteen percent (14%) at the end of the fifth year following the 
effectivity of this Act. 
Provided, That the ERB is hereby authorized to determine at the end of 
the fifth year following the effectivity of this Act, and as often as is necessary, 
taking into account the viability of rural electric cooperatives and the interest of 
consumers, whether the caps herein or theretofore established shall be reduced 
further which shall, in no case, be lower than nine percent (9%) and accordingly 
fix the date of the effectivity of the new caps. 
Provided fina//y, That in any case nothing in this Act shall impair the 
authority of the ERB to reduce or phase out technical or design losses as a 
component of system losses]. 
“THE COSTS OF SYSTEM LOSSES SHALL NOT BE CHARGEABLE 
OR PASSED ON TO THE CONSUMERS AND SHALL BE FOR THE 
ACCOUNT OF THE PRIVATE ELECTRIC UTILITIES AND I OR RURAL 
ELECTRIC COOPERATIVES.” 
SECTION 2. All laws, decrees, executive orders, proclamations, rules and 
regulations, or parts thereof inconsistent herewith are hereby repealed or 
modified accordingly. 
SECTION 3. This Act shall take effect fifteen (15) days after its publication in at 
least two (2) national newspapers of general circulation. 
Approved,