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Senator Gatchalian files bill to lower electricity rates

A fruit stand in a Surigao City corner attracts consumers as night falls on this fast-growing city in Mindanao. Senator Win Gatchalian seeks to lower the cost of one of the world’s most expensive electricity rates thru the “Recoverable System Loss Act.” (Photo by Mark Cayabyab)

Senator Win Gatchalian has filed a bill which seeks to lower electricity rates by as much as 15.67 centavos per kilowatt hour through the reduction of charges passed on to consumers by power companies.

Senate Bill No. 1188, otherwise known as the “Recoverable System Loss Act,” lowers the system loss cap – the maximum charge that can be passed on to consumers to compensate for electricity lost in the distribution system from the receiving point of private distribution utilities and electric cooperatives to the consumer’s metering point – from 8.5% to 5% for distribution utilities, and from 13% to 10% for electric cooperatives, respectively.

The bill also seeks to prohibit electricity distributors from passing on other charges to consumers: non-technical system losses caused by electricity theft or pilferage, and the electricity company’s own power expenses.

“Consumers should not be made to pay for what is ultimately the responsibility of distribution utilities and electric cooperatives. It is time for us to prioritize the welfare of Filipino households over the interests of power sector insiders,” said Gatchalian, the Chairman of the Senate Committee on Energy. 

Additionally, the bill provides for a value-added tax (VAT) exemption for system loss charges. 

If passed into law, Gatchalian estimates that his bill could save consumers as much as P386 million pesos per month in electricity costs.

“Through this measure, we hope to help make electricity more affordable for Filipino households which have to contend with some of the most expensive power rates in the world. Considering the rising costs of food, education, and other necessities, helping people save money on their monthly electricity bills will improve the lives of millions of Filipinos.” said Gatchalian.