Systems loss/EVAT: reducing our electric bill by 19% in an instant

We read in the papers complaints that Meralco and all the other distribution utilities charge their customers for the system losses — loss of electricity due to pilferage and technical and administrative inefficiencies.

The culprit is actually a law enacted by Congress in late 1994, RA 7832, which allows:

1. private utilities like Meralco to charge up to 9.5% of power losses to custormers
2. electric cooperatives like Albay Electric to charge up to 14% of power losses to customers.

Beyond those caps, the utilities absorb the losses.

Thus, in my bill I have to pay P99 for systems loss. That is about 9% of my total bill.
Add the average 10% EVAT to the 9% of systems loss and that comes up to 19′% of my bill.
.
Repeal both laws and we consumers can easily reduce our electric bill by 19%.

Now why doesn’t the Arroyo government remove both the systems loss charge and the EVAT on power? Your guess is as good as mine.

Mon
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REPUBLIC ACT No. 7832 December 8, 1994
ANTI-ELECTRICITY AND ELECTRIC TRANSMISSION LINES/MATERIALS PILFERAGE ACT OF 1994

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REPUBLIC ACT No. 7832

AN ACT PENALIZING THE PILFERAGE OF ELECTRICITY AND THEFT OF ELECTRIC POWER TRANSMISSION LINES/MATERIALS, RATIONALIZING SYSTEM LOSSES BY PHASING OUT PILFERAGE LOSSES AS A COMPONENT THEREOF, AND FOR OTHER PURPOSES

Section 10. Rationalization of System Losses by Phasing out Pilferage Losses as a Component Thereof . – There is hereby established a cap on the recoverable rate of system losses as follows:

(a) For private electric utilities:

(i) Fourteen and a half percent (14 1/2%) at the end of the first year following the effectivity of this Act;

(ii) Thirteen and one-fourth percent (13 1/4%) at the end of the second year following the effectivity of this Act;

(iii) Eleven and three-fourths (11 3/4%) at the end of the third year following the effectivity of this Act; and

(iv) Nine and a half-percent (9 1/2%) at the end of the fourth year following the effectivity of this Act.

Provided, That the ERB is hereby authorized to determine at the end of the fourth year following the effectivity of this Act, and as often as necessary taking into account the viability of private electric utilities and the interest of the consumers, whether the caps herein or theretofore established shall be reduced further which shall, in no case, be lower than nine percent (9%) and accordingly fix the date of the effectivity of the new caps: Provided, further, That in the calculation of the system loss, power sold by the NPC or any other entity that supplies power directly to a consumer and not through the distribution system of the private electric utility shall not be counted even if the billing for the said power used is through the private electric utility.

The term “power sold by NPC or any other entity that supplies power directly to a consumer” as used in the preceding paragraph shall for purposes of this section be deemed to be a sale directly to the consumer if: (1) the point of metering by the NPC or any other utility is less than one thousand (1,000) meters from the consumer, or (2) the consumer’s electric consumption is three percent (3%) or more of the total load consumption of all the customers of the utility, or (3) there is no other consumer connected to the distribution line of the utility which connects to the NPC or any other utility point of metering to the consumer meter.

(b) For rural electric cooperatives:

(i) Twenty-two percent (22%) at the end of the first year following the effectivity of this Act;

(ii) Twenty percent (20%) at the end of the second year following the effectivity of this Act;

(iii) Eighteen percent (18%) at the end of the third year following the effectivity of this Act;

(iv) Sixteen percent (16%) at the end at the fourth year following the effectivity of this Act; and

(v) Fourteen percent (14%) at the end of the fifth year following the effectivity of this Act.

Provided, That the ERB is hereby authorized to determine at the end of the fifth year following the effectivity of this Act, and as often as is necessary, taking into account the viability of rural electric cooperatives and the interest of the consumers, whether the caps herein or theretofore established shall be reduced further which shall, in no case, be lower than nine percent (9%) and accordingly fix the date of the effectivity of the new caps.

Provided, finally, That in any case nothing in this Act shall impair the authority of the ERB to reduce or phase out technical or design losses as a component of system losses.