Power crunch hits Cebu amidst plant shutdowns

CEBU, Philippines — The decommissioning of key baseload power plants in Cebu has triggered a renewed surge in electricity prices, compounding concerns over energy security and market volatility in the region, according to the Cebu Electricity Rights Advocates (CERA).

According to CERA convenor Nathaniel Chua, the withdrawal of 44.64 megawatts (MW) of capacity from the Naga oil-fired power plant, alongside the shutdown of its 0.44-MW Black Start Diesel Engine Generating Unit as of March 31, 2025, has further tightened an already fragile power supply.

He said the loss underscores growing vulnerabilities in Cebu's energy infrastructure, exacerbated by seasonal demand spikes brought about by extreme summer temperatures.

Baseload plants, long regarded as the linchpin of grid stability, are critical in maintaining a minimum and continuous supply of electricity. Their retirement has forced distribution utilities and electric cooperatives to increase reliance on the Wholesale Electricity Spot Market (WESM), where price volatility is significantly higher compared to long-term contracted supply arrangements.

Recent data from the Independent Electricity Market Operator of the Philippines (IEMOP) indicates that WESM prices have surged by between 2.73 percent and 95.5 percent a stark illustration of the market’s sensitivity to generation shortfalls.

Unlike contracted power—which benefits from fixed, pre-negotiated rates—spot market electricity pricing is subject to immediate supply and demand dynamics, often to the detriment of end consumers.

CERA believes that the situation poses a growing threat to household budgets, with energy-intensive appliances such as air conditioners and electric fans becoming increasingly unaffordable for many residents.

Chua warns that, without intervention, the rising cost of electricity risks turning basic comforts into luxuries out of reach for the average Filipino family.

In an appeal to provincial authorities, Chua has urged Governor Gwendolyn Garcia to establish a Third Party Bids and Awards Committee (TPBAC).

This proposed body would comprise representatives from the Department of Energy (DOE), Energy Regulatory Commission (ERC), and National Grid Corporation of the Philippines (NGCP), as well as private sector organizations including the Cebu Chamber of Commerce and Industry (CCCI), the Philippine Retailers Association (PRA), and CERA itself.

Chua underscored the necessity of enforcing strict adherence to the Competitive Selection Process (CSP) to promote transparency and protect consumer interests in power procurement activities.

“The climate crisis will only intensify seasonal demand surges. Ensuring affordable and stable electricity is no longer a choice but a pressing necessity,” he said.

Absent structural reforms, CERA warns that Cebu’s ongoing power shortages risk becoming a permanent feature of the regional economy, threatening broader economic competitiveness and household welfare alike. — (FREEMAN)