The decommissioning of baseload power plants in the City of Naga, Cebu due to aging infrastructure has worsened the limited electricity supply in the province.

This was raised on Wednesday, 30 April, by Cebu Electricity Rights Advocates (CERA) convenor Nathaniel Chua, who proposed the creation of a Third Party Bids and Awards Committee (TPBAC) to protect electricity consumers.

Chua noted that power distribution gaps caused by the loss of 44.64 megawatts (MW) from the decommissioned Naga Oil-Fired Power Plant (OFPP), along with its 0.44-MW Black Start Diesel Engine Generating Unit (BSDEGU), have continued to trigger persistent power shortages in Cebu.

Baseload power refers to the minimum amount of electricity needed to meet demand at any given time. These plants have long been essential in providing stable and steady electricity supply.

With the intense summer heat driving up electricity consumption, the contracted power supply of distribution utilities remains insufficient to meet growing demand across Cebu’s urban areas.

Compared to the Wholesale Electricity Spot Market (WESM), contracted power supply is more stable due to fixed power rates agreed upon in advance. In contrast, WESM prices fluctuate significantly depending on market conditions, often spiking during heatwaves, placing additional burden on consumers.

These fixed-rate agreements offer a more predictable and guaranteed supply, backed by power supply agreements between power plant suppliers and distribution utilities.

However, most electric cooperatives continue to rely heavily on WESM rather than securing long-term contracts from baseload power plants. According to the Independent Electricity Market Operators of the Philippines (IEMOP), electricity rates have recently surged by as much as 95.5 percent, with earlier rates as low as P2.73 per kilowatt-hour.

Such price volatility highlights the urgent need to protect consumers. Chua proposed forming a TPBAC composed of the governor as chairman, alongside representatives from the Department of Energy (DOE), Energy Regulatory Commission (ERC), and the National Grid Corporation of the Philippines (NGCP), as well as the Cebu Chamber of Commerce and Industry (CCCI), Philippine Retailers Association (PRA), and CERA.

The TPBAC would ensure that the Competitive Selection Process (CSP) among power producers is conducted transparently and in accordance with the law, ultimately protecting consumers from price surges.

“We can expect harsher heat and weather for more summers to come because of our ongoing climate. Basic comforts like our air conditioning may soon be considered as costly luxuries that the average Filipino might find too expensive to afford,” Chua said.

CERA echoes the sentiment that simple joys, like enduring heat waves with electricity-powered appliances, must not become unreachable luxuries.

Long-term solutions are necessary to address ongoing power shortages and distribution issues, in order to achieve stable and affordable electricity rates for all.