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SEVENTEENTH CONGRESS OF TFIE 
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REPUBLIC OF THE PHILIPPINES 
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FIRST REGULAR SESSION 
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MAR 13 |P3 5 4
RECEIWLU BY;
SENATE
SENATE BILL NO. 1388
INTRODUCED BY SENATOR JOSEPH VICTOR G. EJERCITO
AN ACT
REDUCING THE ALLOWABLE SYSTEMS LOSS FROM PRIVATE 
UTILITY COMPANIES AND RURAL ELECTRIC COOPERATIVES 
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 7832, AS 
AMENDED BY SECTION 43(f) OF REPUBLIC ACT NO. 9136, AND 
REPUBLIC ACT NO. 8424, AS AMENDED BY REPUBLIC ACT NO. 9337, 
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The Electric Power Industry Reform Act (EPIRA) was enacted to achieve 
reliable and affordable electricity for the Philippines.
Almost two decades after the EPIRA's enactment, we still have one of the 
highest electricity price in the Asia-Pacific Region. As published in tlie 27th 
Status Report on EPIRA Implementation dated October 2015, tlie average 
electricit}7 rates amount to Php8.04/kWh. Tlie bulk of the cost of electricity in 
the Electric Companies unbundled average effective residential rates comes 
from Generation. Notable however is the share of tlie system loss to the total 
electricity rates which amounts to more tlian 8%.
Distribution companies should use new technology and reforms to 
increase tlieir efficiency and lessen the technical losses from their natural 
operations. They should find ways to enliance their pilferage management so 
that tliere would be no teclmical losses that can be passed on to their consumers. 
To compel them to implement network efficiency, it is hereby proposed that the 
recoverable system loss cap should be reduced to 5% for private electric utilities
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and 7% for rural electric cooperatives. This reform will result to lower electricity 
rates.
It is liigh time to reduce the allowable recoverable system loss to 
unburden the consumers and industries that heavily rely on electricity. As such, 
the passage of tliis bill is earnestly sought.
JOSEPH VICTOR G. EJERCITO


SEVENTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
FIRST REGULAR SESSION
SENATE
SENATE BILL NO. 
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HAR13. P 3 S 4
RECEIVLD BV; T
INTRODUCED BY SENATOR JOSEPH VICTOR G. EJERCITO
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AN ACT
REDUCING TFIE ALLOWABLE SYSTEMS LOSS FROM PRIVATE 
UTILHT COMPANIES AND RURAL ELECTRIC COOPERATIVES 
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 7832, AS 
AMENDED BY SECTION 43(f) OF REPUBLIC ACT NO. 9136, AND 
REPUBLIC ACT NO. 8424, AS AMENDED BY REPUBLIC ACT NO. 9337, 
AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Title of the Act - This Act shall be known as the ^Recoverable 
System Loss Act".
SEC. 2. Declaration of Policy - It is hereby declared the policy of the State to 
ensure the quality and affordability of the supply of electric power in the 
country. In accordance with this, the State shall ensure that rates charged by 
electric companies to consumers reflect the true cost of electricity.
SEC. 3. Recoverable System Loss. There is hereby established a cap on the
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recoverable rate of system losses as follows;
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(a) Fivo percent (5%) for private electric utilities; and 
(b) Seven (7%) for rural electric cooperatives:
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Provided, that non-teclmical losses, actual use of electricity by DUs or ECs and
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other components which may be determined by the Energy Regulatory
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Commission (ERC) shall be excluded from the computation of recoverable
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system loss charges. Provided further that the caps herein provided shall apply
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to tlie area of coverage of private electric utilities and rural electric cooperatives


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as of the date of the effectivity of this Act and in areas of coverage that may be 
added on after the enactment of this Act.
For purposes of this Act, systems loss shall refer to the difference between the 
amount of electricity purchased by distribution utility and the amount of 
electricity paid for by the users. Non-technical losses refer to electricity lost 
through causes external to the power system such as pilferage, theft, 
administrative inefficiencies and costs and other analogous causes.
SEC. 4. huplewcntiii^ Rules and Regulations. - The Department of Energy and in 
consultation with the ERC, shall promulgate the Implementing Rules and 
Regulations that shall be necessaiy to carry out and implement the provisions 
of this Act within sixty days (60) from the effectivity of this Act.
SEC. 5. Sepnrahilit}/ Clause. - If any provision of this Act is held invalid or 
unconstitutional, other provisions not affected thereby shall continue to be in 
full force and effect.
SEC. 6. Repealing Clause. - All laws, decrees, executive orders or parts thereof 
inconsistent with the provisions of this Act are hereby repealed, amended or 
modified accortlingly.
SEC. 7. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
complete publication in the Official Gazette or in a national newspaper of general 
circulation.
Approved,