EPIRA A FAILURE? Ejercito seeks overhaul to lower power costs

More than two decades after the Electric Power Industry Reform Act (EPIRA) was enacted, Senate Senior Deputy Majority Leader JV Ejercito said the law should be overhauled, arguing that it has failed to deliver its promise of lower electricity rates for Filipino consumers.

Ejercito filed Senate Bills Nos. 2342 and 2343, which seek to eliminate charges that he said continue to inflate consumers' electricity bills.

"Our people are already carrying a heavy burden. The prices of basic goods are high, and electricity rates remain expensive. Consumers should not be paying for electricity they never used," Ejercito said during the Senate Committee on Energy hearing.

He said the measures were filed in response to President Ferdinand Marcos Jr.'s call to amend EPIRA.

"Following the President's appeal, we immediately filed Senate Bill No. 2342, which seeks to permanently abolish recoverable system loss charges, and Senate Bill No. 2343, which removes the value-added tax (VAT) imposed on electricity bills," he said.

Ejercito also recalled the country's experience with power purchase agreements (PPAs) in the 1990s, when the government entered into long-term contracts to address the power crisis.

He said consumers ultimately bore the cost of those agreements, including payments for electricity that was never actually consumed.

"We should have learned from the experience of those old power purchase agreements. When all the risks and costs are passed on to consumers, it is ultimately the Filipino family that pays the price. That should never happen again," Ejercito said.

He argued that the same principle should apply to system loss charges.

Under Senate Bill No. 2342, or the Consumer Protection Against System Losses Act, distribution utilities and electric cooperatives would no longer be allowed to pass system loss charges on to consumers through their monthly electricity bills.

The bill seeks to amend provisions of EPIRA covering both technical and non-technical system losses, including electricity pilferage and illegal meter tampering. Instead of being charged to consumers, these costs would be treated as operating expenses of distribution utilities and electric cooperatives.

"Consumers should only pay for the electricity they actually use. It is neither fair nor just for them to shoulder costs arising from inefficiencies, outdated systems, or losses that are beyond their control," Ejercito said.

The senator also filed Senate Bill No. 2343, which seeks to exempt electricity bills from the value-added tax.

The proposal also strengthens the mandate of the Energy Regulatory Commission to ensure that charges imposed by distribution utilities and electric cooperatives remain reasonable and equitable while enhancing consumer protection.