It is Pacquiao fight day. It might as well be a holiday. Family and friends have gathered around the television. Food is on the table. You hope Mommy Dionisia’s prayers, perhaps even her barang, are working. You add your own private hex on the opponent.
The bell rings. There are only two sides: ours and his. We know what we want. Find the opening. Land the punch. Put the other fellow on the canvas.
Congress sometimes seems to approach electricity prices with the same ambition.
Knock out system loss. Defeat VAT. Make the utility absorb the cost. Declare the consumer the winner.
If only electricity costs stayed down when you knocked them down.
A cost removed from one corner of the bill can get up in another.
The last installment followed taxes, subsidies and discounts to the people who ultimately pay them. Its conclusion carries into this one: the electricity bill is, in part, a statute book printed in pesos.
Many charges appear because law or regulation permits them and decides who bears them. Change the rule and the peso may move from consumer to utility, utility to taxpayer, or one group of consumers to another. Sometimes the cost disappears. Sometimes only its address changes.
This installment opens that statute book while Congress is still writing it.
Dozens of bills touch system loss, its taxation, recovery or enforcement. Some would abolish or reduce it, preserve only technical loss, distinguish private utilities from cooperatives, remove VAT, prevent cost migration, or go after the thief rather than the tariff.
This is economics conducted in statutes. The useful way to read the pile is not by sponsor or bill number. Follow the peso.
Does a proposal reduce the underlying cost? Put the incentive on whoever controls it? Preserve efficient investment? Or merely move the peso somewhere less visible?
The cleanest political punch is obvious: take system loss off the consumer’s bill.
The stronger House proposals prohibit direct and indirect recovery, make utilities bear technical and non-technical losses, and bar the cost from returning under another name.
That can sharpen incentives to improve metering, conductors and transformers and to find illegal connections. But physics complicates the slogan: what if removing the last percentage point of technical loss costs more than it saves?
HB 10572 makes lost electricity unrecoverable while preserving prudent modernization spending. HB 10357 adds five-year efficiency plans, independent audits, public scorecards and targeted assistance to electric cooperatives.
A utility should bear avoidable loss, not be punished for efficient investment that prevents tomorrow’s loss. Nor can a network modernize overnight merely because a statute can.
Then comes the Ice Seller’s distinction: melting is not chipping. Some proposals retain verified technical loss while excluding non-technical loss; others give rural cooperatives higher or transitional ceilings.
Electricity dissipates regardless of ownership. But unavoidable loss varies with distance, load density, voltage, network configuration and terrain.
EPIRA recognized those differences. Senate Bill 2131 instead proposes a one-percent cap for private distribution utilities and rural cooperatives while excluding non-technical loss from recovery.
One percent is wonderfully simple. Copper is not. A dense city utility and a mountain cooperative serving scattered communities do not operate the same network. If Congress imposes one ceiling, it should consciously decide who absorbs geography.
Congress can set the distributive rule without becoming an engineering bureau. The ERC can calculate transparent technical benchmarks as networks and technology change.
But rules do not enforce themselves. Bills promising ERC independence, deadlines, fiscal autonomy and technical capacity matter; a deadline imposed on an understaffed regulator may simply produce bad decisions faster.
SBN 1477 would allow summary treatment for DOE-certified contracts within ERC benchmark ranges. Scrutiny therefore moves into the benchmark. It should distinguish technology, grid and load profile, use competitive price discovery where possible, publish its method and updates, and face ex-post audit.
Faster regulation is valuable. Faster error is not.
SB 2124 takes another route: exempt residential system loss from VAT and prevent the saving from being clawed back through other pass-through charges. The tax disappears; the physical loss remains. Only one of those changes the incentive to lose less electricity.
HB 9106 illustrates cost migration. It removes system loss as a separate bill item but allows it into operating expenses, subject to ERC efficiency standards. The name can disappear while the peso survives.
House Bill 750 asks why government should argue only about who pays for stolen electricity instead of stopping the theft. It strengthens inspection, disconnection, evidence and penalties while preserving recovery against the offender.
Utilities can meter, detect anomalies and preserve evidence. Law enforcement can investigate and prosecute. Those responsibilities should meet before one side is left holding an ice pick and the other a complaint form.
There is also a lawyer’s problem inside the economist’s one. These terms already live in the Codes and ERC rules. Careless definitions can turn intended bill relief into years of rate litigation.
The argument is wider than system loss. Other EPIRA proposals would change cross-ownership rules, divide PCC-ERC competition responsibilities, alter public-offering requirements, reopen government generation-and revise the market those generators enter.
WESM itself belongs among Congress’s questions. It is a designed market around which has accumulated special government fiscal support to preferred institutions, non-market price safeguards, preferential dispatch regimes, settlement mechanisms and administrative interventions. Each may be defensible alone. Together, have they altered price formation, dispatch, investment incentives, competition and who pays? Is it time to revisit WESM’s rationale and mechanics?
PEMC has begun reviewing enhancements introduced in 2021. Congress should ask whether the whole architecture still delivers transparent price discovery, efficient dispatch and genuine competition.
Nor can WESM be assessed apart from transmission. Transmission is a regulated natural monopoly, not a competitive segment, but it is not economically outside the market. As Part Four showed, connections, losses, congestion and reserves shape who competes, which plants dispatch and the prices WESM produces.
Ownership rules should likewise reach actual control, not paper percentages. And Part Three recalled the earlier experiment with government as generator, purchaser and ultimate risk-bearer: blackouts, NPC debt approaching P900 billion and obligations consumers spent decades retiring. Any bill reopening that door should confront that history.
Congress does not lack ideas. It lacks assembly.
One bill supplies accountability, another modernization, another regulatory capacity, another tax relief, another enforcement. Good legislation can combine them while protecting against cost migration.
Electricity reform is not winner-take-all.
The better questions are these: Does responsibility follow control? Does the law distinguish physics from failure? Does it attack a cost’s cause as well as allocate it? Does relief identify who pays? Does reform preserve efficient investment? Can the enforcing institution do the job?
A reform can make one line cheaper while making investment harder, or protect today’s consumer while raising tomorrow’s cost. The consumer deserves relief. But the cheapest-looking statute is not necessarily the cheapest electricity policy.
Congress has many fragments of an electricity policy. What it does not yet have is the package.
That is where the final installment begins.
Atty. Laurence R. Rogero is an infrastructure lawyer with three decades of experience in the Philippine and international power and water sectors, advising project sponsors, lenders, and investors. He is lead independent director of a publicly listed infrastructure holding company with interests in energy and water. He is pursuing postgraduate studies in economics at Ateneo de Manila University, where he also lectures in the School of Management. He graduated magna cum laude from the UP School of Economics, earned his law degree from UP, and obtained an LL.M. with Distinction from Georgetown University as a Fulbright Fellow. The views expressed are his own and should not be attributed to any institution, organization, client, company, or other entity with which he is affiliated.