ANTI-ELECTRICITY AND ELECTRIC TRANSMISSION LINES MATERIALS PILFERAGE ACT OF 1994

Case Overview and Summary

Summary of the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994 (Republic Act No. 7832)

Illegal Use of Electricity (Section 2):
- Declares the following acts as unlawful:
• Tapping or making unauthorized connections to overhead lines, service drops, or electric service wires without consent. (Section 2a)
• Tapping or making unauthorized connections to existing electric service facilities of a registered consumer without consent. (Section 2b)
• Tampering, installing, or using tampered electrical meters, jumpers, current reversing transformers, shorting wires, loop connections, or any device that interferes with proper metering or diverts electricity. (Section 2c)
• Damaging or destroying an electric meter, equipment, wire, or conduit that interferes with proper metering. (Section 2d)
• Knowingly using or receiving the direct benefit of electric service obtained through any of the above acts. (Section 2e)

Theft of Electric Power Transmission Lines and Materials (Section 3):
- Declares the following acts as unlawful:
• Cutting, sawing, slicing, separating, splitting, severing, smelting, or removing any electric power transmission line/material or meter from its installation or storage location without the owner's consent, whether for profit or not. (Section 3a1)
• Taking, carrying away, removing, or transferring any electric power transmission line/material or meter from its installation or storage location without the owner's consent, whether for profit or not. (Section 3a2)
• Storing, possessing, or keeping any electric power transmission line/material or meter without the owner's consent, whether for profit or not. (Section 3a3)
• Loading, carrying, shipping, or moving any electrical power transmission line/material without securing a clearance/permit from the owner or the National Power Corporation (NPC), whether for profit or not. (Section 3a4)
- Defines "electrical power transmission line/material" as steel towers, woodpoles, cables, wires, insulators, line hardwares, electrical conductors, and other related items with a minimum voltage of 69 kilovolts (kv). (Section 3b)

Prima Facie Evidence (Section 4):
- Specifies circumstances that constitute prima facie evidence of illegal use of electricity, such as bored holes in meters, presence of salt or sugar in meters, tampered wiring or seals, presence of current reversing transformers or jumpers, mutilation or tampering of instruments, and acceptance of money by utility employees for not reporting violations. (Section 4a)
- Possession of electric power transmission line/material by a person not engaged in power transmission or distribution is prima facie evidence of theft. (Section 4b)

Incentives (Section 5):
- Provides for a monetary reward of at least ₱5,000 to any person who reports a violation of Section 3 (theft of transmission lines/materials) to the NPC or police authorities. (Section 5)

Disconnection of Electric Service (Section 6):
- Allows private electric utilities or rural electric cooperatives to immediately disconnect electric service after a written notice if a person is caught committing any of the acts in Section 4a or if the circumstances in Section 4a are discovered for the second time. (Section 6)
- Defines "differential billing" as the amount to be charged for unbilled electricity illegally consumed, based on methodologies using factors like highest recorded consumption, estimated consumption, or consumption before/after a drastic drop. (Section 6)
- Allows reconnection upon deposit of the differential billing amount, which will be credited if the court finds no illegal use, or paid double if found guilty. (Section 6)

Penalties (Section 7):
- Violation of Section 2 (illegal use of electricity): Prision mayor (6 years and 1 day to 12 years imprisonment) or a fine of ₱10,000 to ₱20,000, or both. (Section 7a)
- Violation of Section 3 (theft of transmission lines/materials): Reclusion temporal (12 years and 1 day to 20 years imprisonment) or a fine of ₱50,000 to ₱100,000, or both. (Section 7b)
- If committed by or in connivance with a utility employee, the penalty is one degree higher and dismissal from employment. (Section 7c)
- If multiple offenses are committed, the penalty is the next higher degree. (Section 7c)
- If committed by a partnership, firm, corporation, or association, the penalty is imposed on the president, manager, and officers responsible. (Section 7c)

Violation of Contract Surcharges (Section 8):
- Allows private electric utilities or rural electric cooperatives to impose surcharges on bills of consumers apprehended for tampering with meters or other violations:
• First apprehension: 25% of current bill as surcharge (Section 8a)
• Second apprehension: 50% of current bill as surcharge (Section 8b)
• Third and subsequent apprehensions: 100% of current bill as surcharge (Section 8c)
- Authorizes disconnection of service for non-payment of surcharges. (Section 8)

Restriction on Restraining Orders or Writs of Injunction (Section 9):
- Prohibits courts from issuing restraining orders or writs of injunction against utilities exercising the right to disconnect service unless there is prima facie evidence of bad faith or grave abuse of authority. (Section 9)
- If a court issues an injunction, it must be accompanied by a bond equivalent to the differential billing, penalties, and charges, or the total value of the subject matter. (Section 9)
- The utility can file a counterbond to dissolve the injunction. (Section 9)

Rationalization of System Losses by Phasing out Pilferage Losses (Section 10):
- Establishes caps on recoverable rates of system losses for private electric utilities and rural electric cooperatives, with the caps decreasing over time:
• Private electric utilities: 14.5% (first year), 13.25% (second year), 11.75% (third year), 9.5% (fourth year), and lower caps determined by the Energy Regulatory Board (ERB) after the fourth year, but not lower than 9%. (Section 10a)
• Rural electric cooperatives: 22% (first year), 20% (second year), 18% (third year), 16% (fourth year), 14% (fifth year), and lower caps determined by the ERB after the fifth year, but not lower than 9%. (Section 10b)
- Excludes power sold directly to consumers by the NPC or other entities from the calculation of system losses for private electric utilities. (Section 10a)
- Allows the ERB to reduce or phase out technical or design losses as a component of system losses. (Section 10)

Area of Coverage (Section 11):
- The caps in Section 10 apply only to the area of coverage of private electric utilities and rural electric cooperatives as of the effectivity date of the Act. (Section 11)
- The ERB will determine the permissible levels of recovery for system losses in areas added to the coverage of utilities or cooperatives after the effectivity date. (Section 11)

Recovery of Pilferage Losses (Section 12):
- Requires private electric utilities or rural electric cooperatives that recover pilferage losses to report the recovery details to the ERB within 30 days, including the amount recovered, claimed, and any explanation for failure to recover the full amount. (Section 12)
- Prohibits accepting payment from consumers for pilferage losses if there is a pending court case, unless a court-approved compromise agreement is executed. (Section 12)

Information Dissemination (Section 13):
- Requires private electric utilities, rural electric cooperatives, the NPC, and the National Electrification Administration (NEA) to undertake a vigorous campaign to inform consumers about the provisions of the Act, especially Sections 2, 3, 4, 5, 6, 7, and 8, within 60 days of the effectivity date and at least once a year thereafter. (Section 13)
- Requires incorporating a condensation of the provisions in contracts with new consumers. (Section 13)

Rules and Regulations (Section 14):
- Requires the ERB to issue rules and regulations within 30 working days after conducting hearings to ensure efficient and effective implementation of the Act, including methodologies for computing the amount of electricity illegally used and the amount of payment or deposit. (Section 14)
- Requires the ERB to issue rules and regulations on the submission of reports required under Section 12 and the procedure for distributing or crediting recovered pilferage losses to consumers. (Section 14)

Repealing Clauses (Section 16):
- Repeals the provisions in Presidential Decree No. 401, as amended by Batas Pambansa Blg. 876, penalizing unauthorized electrical connections, tampering with meters, and theft of electricity. (Section 16)
- Repeals or modifies all other laws, ordinances, rules, regulations, and issuances inconsistent with the Act. (Section 16)

Effectivity Clause (Section 17):
- The Act takes effect 30 days after its publication in the Official Gazette or in any two national newspapers of general circulation. (Section 17)