Group flags power rate hikes, urges efficiency reforms

CEBU, Philippines — The Cebu Electricity Rights Advocates (CERA) has expressed concern over the latest electricity rate increases imposed by major power distributors in Cebu, warning that the adjustments are placing additional strain on household budgets across the province.

In a statement released yesterday, CERA convenor Nathaniel Chua said the group was dismayed by the recent rate hikes implemented by Cebu Electric Cooperative I, Cebu Electric Cooperative II, and Cebu Electric Cooperative III—collectively known as CEBECO. The cooperatives’ rates now average ?13.37 per kilowatt-hour (kWh), reflecting increases of ?1.30/kWh and ?0.33/kWh in recent billing cycles.

Chua added that Visayan Electric (VECO) has also adjusted its rate to ?12.79/kWh, up by ?0.35/kWh.

“While we recognize the complexities of the energy market, the financial impact on Cebuano households must be balanced with more aggressive utility-side cost-saving measures,” Chua said.

According to CERA, the price increases are driven by both external and internal factors. Electricity demand in Cebu is estimated to be growing by around 150 megawatts annually, prompting CEBECO to source additional supply from the Wholesale Electricity Spot Market (WESM), where prices are highly volatile.

During periods of peak demand or when power plants go offline, distributors are forced to purchase electricity at elevated spot market rates. CERA noted that heavy reliance on WESM exposes consumers to sudden price spikes that could be mitigated through more diversified and stable power supply agreements.

The group also pointed to aging distribution systems in several cooperative areas, contributing to higher technical losses that are ultimately passed on to consumers. Reports indicate that some cooperative districts continue to post system loss levels near the maximum threshold allowed by regulators.

CERA compared the operational environments of VECO and CEBECO, noting that while VECO operates a relatively modern urban grid, it still faces the challenge of optimizing bilateral power contracts to ensure long-term affordability and reliability.

In contrast, CERA said rural areas served by CEBECO are hampered by operational inefficiencies, high administrative overhead, and what it described as “bureaucratic inertia,” which have slowed innovation and responsiveness. Unlike private utilities with greater access to capital for modernization, electric cooperatives face structural constraints that limit rapid upgrades and efficiency improvements.

CERA estimates that household electricity expenses rose by 15 to 20 percent in early 2026, outpacing increases in the prices of many other basic commodities. The group warned that sustained rate hikes could significantly burden low- and middle-income families.

To help stabilize energy costs in Cebu, CERA is pushing for the following measures:  A transparent review of CEBECO’s distribution efficiency to reduce technical losses; A reassessment of Power Supply Agreements (PSAs) by both VECO and CEBECO to secure more stable and lower-cost energy sources; The suspension of all “under-recovery” collections until service reliability benchmarks are achieved.

“Operational excellence is the best hedge against inflation,” Chua said, emphasizing the need for stronger collaboration among utilities, regulators, and consumers to ensure affordable and reliable electricity in Cebu.

As the new rate adjustments take effect, consumer groups are calling on power distributors to prioritize efficiency reforms and long-term supply stability to cushion households from further volatility in the months ahead. — (FREEMAN)