Penalizing Pilferage of Electricity and Materials

Unauthorized cutting, removing, or tampering with electric power transmission lines/materials, including meters, from any installation or lawful storage site is prohibited.
Transporting or possessing such materials without the owner's consent is unlawful.
Moving transmission materials requires a clearance or permit from the owner or National Power Corporation (NPC).
"Electrical power transmission line/material" includes towers, poles, cables, insulators, conductors, and related hardware with minimum voltage of 69 kV.

Certain physical conditions related to the electric meter or wiring (e.g., bored holes, tampering devices, altered seals) constitute prima facie evidence of illegal electricity use.
Such evidence permits immediate disconnection, filing of charges, and lifting of injunctions against utilities.
Possession of stolen transmission materials by unauthorized persons constitutes prima facie evidence of theft.

A minimum monetary reward of P5,000 is granted to anyone reporting theft of transmission line materials.
The Department of Energy (DOE) and NPC shall issue guidelines for implementing this incentive.

Electric utilities may disconnect service after written notice upon discovery of illegal use or second discovery of suspicious circumstances.
Service disconnection can be suspended if the consumer deposits the differential billing amount.
The differential billing is double the estimated value of illegally used electricity, computed using standardized methodologies based on consumption history.
If the consumer is found innocent, the deposit is refunded with legal interest, and the utility pays double the deposited amount with interest.

Illegal use of electricity (Section 2) carries prision mayor or fines between P10,000 and P20,000, or both.
Theft of transmission materials (Section 3) is punishable by reclusion temporal or fines between P50,000 and P100,000, or both.
Employees or officers of utilities involved face penalties one degree higher, dismissal, perpetual disqualification from similar employment, and public office.
Corporations and legal entities face penalties imposed on responsible officers.

Utilities may levy surcharges on consumers found tampering with meters or illicitly using electricity:
- First offense: 25% surcharge of current bill
- Second offense: 50% surcharge
- Third and subsequent offenses: 100% surcharge
Utilities may disconnect service for nonpayment of surcharges.
"Apprehension" refers to discovery of illegal circumstances in the consumer's premises.

Courts may not issue injunctions or restraining orders against service disconnection unless bad faith or grave abuse is evident.
Any injunction is subject to posting of a bond equivalent to the differential billing and penalties.
Public utilities may file a counterbond to dissolve the injunction.
Courts must report reasons for injunctions to the Supreme Court within ten days.

Caps on recoverable system losses are phased down over time for private utilities and cooperatives:
- Private utilities: from 14.5% to 9.5% over four years, with possible further reduction to 9%
- Rural electric cooperatives: from 22% to 14% over five years, with possible reduction to 9%
Power supplied directly to consumers by NPC or others not via the utility's distribution system is excluded from system loss calculations.
ERB authorized to adjust loss caps considering viability and consumer interest.

Loss caps apply only to existing service areas of utilities/cooperatives as of the Act's effectivity.
Expansions or new service areas have loss recovery levels set by the Energy Regulatory Board (ERB).

Utilities/cooperatives must report pilferage loss recoveries to ERB within 30 days, detailing consumer, date, amounts, and reasons for partial recovery if applicable.
Payments in pending cases require court-approved compromise agreements.

Utilities, NPC, and National Electrification Administration (NEA) shall conduct campaigns to inform consumers about the Act's provisions.
Such campaigns should occur within 60 days and annually thereafter.
New consumer contracts must include a condensed version of key provisions.

The ERB shall issue implementing rules within 30 working days after hearings.
Rules cover methodologies for computing illegal electricity usage and differential billing.
Reporting procedures and distribution or crediting of recovered pilferage losses are also regulated.

PD No. 401 and Batas Pambansa Blg. 876 provisions on unauthorized connections and tampering are repealed.
Conflicting laws and regulations are repealed or modified accordingly.

The Act takes effect 30 days after publication in the Official Gazette or two national newspapers.