Bill seeks to cut cost of electricity

MANILA, Philippines – A neophyte congressman filed yesterday a bill that seeks to reduce the cost of electricity by stopping the practice of power distributors of billing customers for electricity that is stolen or lost in their distribution lines.

Navotas Rep. Tobias Tiangco’s bill would amend Republic Act 7832, the law that penalizes the theft of electricity and power lines and accessories, and allows distributors to charge customers for system loss.

Tiangco said discontinuing the practice of billing customers for system loss would “unburden the general public from shouldering the cost of losses it had nothing to do with.”

He said people should not be made to pay for electricity that is stolen by other people who do not want to pay for it or who want to lower their bills through jumpers and other gadgets, and for power that drops from transmission and distribution lines due to heat, rain and other causes.

At present, he said the law allows private distributors in Metro Manila and other parts of the country to charge 9.5 percent of such losses to their customers.

On the other hand, electric cooperatives in the provinces are authorized to pass on up to 14 percent of such losses, he added.

He pointed out that what made matters worse for the public was the decision of the Bureau of Internal Revenue and the Energy Regulatory Commission to allow the imposition of the 12-percent value-added tax on system loss charges.

People are not only paying for electricity that they don’t use but are charged the 12-percent VAT for such electricity, he stressed.

Tiangco said the decision of the two agencies to include system loss charges in the coverage of VAT has no basis.

“There is no product sold or service rendered that is subject to VAT. System loss is not a service, it is in fact a disservice,” he stressed.

He said system loss charges have amounted to tens of billions of pesos since 2004, when Congress allowed these to be passed on to customers.

Citing the testimony, a Manila Electric Co. (Meralco) official has given to the House Committee on Ways and Means, he said in Metro Manila alone, such charges have reached a staggering amount of P13 billion, excluding the 12-percent VAT.

This means that Metro Manilans have paid more than P14 billion, including taxes, for electricity that they did not use because it was stolen or it dropped from power lines due to various causes, he said.

Tiangco has raised his concerns on system loss charges and the VAT imposed on it with the ways and means committee, whose chairman, Rep. Hermilando Mandanas, and other members have promised to support his proposals.

He has vowed to also stop the billing of system loss charges by water utilities like Maynilad and Manila Water, the two water distributors in Metro Manila.

The previous 14th Congress had tried but failed to reduce the cost of electricity. It launched an inquiry three years ago after then President Arroyo made a big issue of high electricity rates by blaming Meralco.

Mrs. Arroyo is now a House member representing Pampanga’s second district. She has not filed any electricity-related bill. –Jess Diaz (The Philippine Star)