Limited power plants blamed in Cebu mess

The decommissioning of baseload power plants due to aging infrastructure of various engine generating units in the City of Naga, Cebu from the previous month has aggravated the limited supply of electricity in Cebu.

This was cited on Wednesday, 30 April, by Cebu Electricity Rights Advocates convenor Nathaniel Chua as he suggested to create a Third Party Bids and Awards Committee to protect the electricity consumers.

He said that power distribution gaps caused by the 44.64 megawatt (MW) loss of the decommissioned Naga Oil-Fired Power Plant, along with its 0.44-megawatt Black Start Diesel Engine Generating Unit last 31 March 2025, has continued to show effects of lasting power shortages in Cebu Province.

We classify baseload power as the minimum amount of electricity needed to meet the demand at any given time. Baseload power plants have been essential to a stable and steady supply of electricity for the longest time up until today.

Geographically, the intense summer heat naturally shoots up for more electricity to keep cool indoors. Continuous increases in the contracted power supply of distribution utilities are still not sufficient enough to answer the present demand of our power-hungry cities.

Contracted power supply from power plants is more stable compared to Wholesale Electricity Spot Market due to its stability in price-per-peso value attributed to prior agreed power rates, unlike for WESM prices that heavily rely on present market rates that rise higher as a result of the harsh summer heat.

The presence of contracted power prices in the electricity market allows for fixed rates agreed upon a specific period between a power plant supplier and a distribution utility customer. This ensures stable supply since contracted capacity is predictive, guaranteed and protected by a power supply agreement.

However, most electric cooperatives are more dependent on the WESM method rather than getting power supply from baseload power plant. Latest data from Independent Electricity Market Operators stated that there has been a sudden increase of electricity rates from as low as P2.73 percent to an increase of 95.5 percent. These volatilities put the interest of electricity consumers at the disadvantage.