There is an urgent need to stop the unfair and unjustified practice of private electric utility companies passing system loss charges on to consumers---something that has been going on for three decades.

Thus, said Cavite 2nd district Rep. Lani Mercado-Revilla, author of House Bill (HB) No.6976 which recently underwent first reading in the House of Representatives.

Mercado-Revilla said the bill seeks to amend Republic Act (RA) No. 7832 and finally correct what she described as a long-standing imbalance in the country’s power billing system—one that unfairly shifts the burden of distribution losses from utility companies to ordinary consumers.

RA No.7832 or the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act has been a law since 1994.

Through her measure, the lady solon also wants to see a reduction in the allowable system loss recovery of rural electric cooperatives to a maximum of five percent.

“For decades, Filipino households have been paying for electricity they never consumed and losses they did not cause. This practice is not only unfair, it is fundamentally unjustified,” Mercado-Revilla said in a statement over the weekend.

Her bill directly addresses system loss charges, a line item in electricity bills that represents power lost during transmission and distribution. While technical losses are unavoidable, Mercado-Revilla stressed that a significant portion of system loss comes from pilferage, illegal connections, meter tampering, and operational inefficiencies—costs that consumers should not be made to shoulder.

Under the bill, private electric utilities will be prohibited from passing any system loss charges to consumers, effectively requiring companies to absorb losses arising from inefficiency and illegal activity.

Meanwhile, rural electric cooperatives will only be allowed to recover legitimate technical losses, strictly capped at five percent and subject to annual verification by the Energy Regulatory Commission (ERC) to ensure that only valid costs are passed on to consumers.

The measure further mandates that any system loss collections allowed for rural electric cooperatives be used exclusively for upgrading power lines, modernizing infrastructure, and installing anti-pilferage measures, with the clear objective of continuously lowering system losses over time rather than treating them as a permanent revenue stream.

Mercado-Revilla also emphasized that the bill seeks to remove the 12 percent Value-Added Tax (VAT) imposed on system loss charges. She says the current set-up is a “double burden” on consumers who are forced to pay both for unconsumed electricity and the tax imposed on it.

She noted that despite nearly 30 years of system loss recovery under existing law, there has been no corresponding improvement in efficiency that would justify the continued imposition of these charges on consumers.

“The law never intended system loss to be a permanent burden. Yet year after year, families are left with higher power bills while inefficiencies persist,” the Caviteño noted.

With electricity costs remaining one of the biggest household expenses for Filipino families, Mercado-Revilla underscored the urgency of passing the measure, warning that any delay prolongs an inequitable system that disproportionately affects low- and middle-income households.

“Every month that this bill is delayed means millions of consumers continue paying for losses they did not create. This is a consumer protection reform whose time has long come, and Congress must act with urgency,” she said.