VECO secures ERC relief to soften July rate hike

CEBU, Philippines — Visayan Electric has taken urgent measures to cushion the impact of soaring generation costs, preventing residential electricity rates for July 2026 from increasing to P17.59 per kilowatt-hour (kWh).

Instead, through an Energy Regulatory Commission (ERC)-approved deferment of a portion of the generation costs, the distribution utility capped the residential rate at P14.90/kWh, up from P13.74/kWh in June.

The utility said that for a household consuming 200 kWh per month, the deferred rate would add about P232 to the electricity bill this billing cycle, compared with an estimated P770 increase had the intervention not been implemented.

Visayan Electric, in a statement, said that the deferment reduced the immediate increase by nearly 70 percent, easing the burden on consumers amid rising electricity prices.

“We are not simply passing these costs through to the consumer,” said Visayan Electric President and General Manager Mark Anthony Kindica.

“We are proactively engaging the ERC for cost deferment, securing immediate supply agreements with generators, and accelerating our shift to stable, long-term power sources to minimize the burden on our customers,” he added.

According to the utility, a series of market and supply disruptions since February drove up generation costs across the Visayas Grid.

These included higher transmission charges, rising global fuel prices linked to market disruptions in the Middle East, increased electricity demand during the summer months that strained available reserves, and higher prices at the Wholesale Electricity Spot Market (WESM) due to generation shortfalls that required more expensive spot-market purchases.

The situation worsened in early July when a Red Alert was declared and more than 1,000 megawatts (MW) of generating capacity became unavailable, pushing generation charges—the largest component of consumers’ electricity bills—to a one-year high of P11.00/kWh.

To help mitigate the impact on consumers, Visayan Electric said it pursued an ERC-approved cost deferment, entered into Emergency Power Supply Agreements (EPSA) with power generators to secure immediate supply, and launched a Competitive Selection Process (CSP) this month to obtain more stable and reliable power supply beginning next year.

Visayan Electric also said it continues to coordinate with the Independent Electricity Market Operator of the Philippines (IEMOP) and the ERC to help maintain supply reliability while managing electricity costs for consumers. (CEBU NEWS)