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Cebu’s provincial government, energy agencies, power companies and business groups have formed the Cebu Energy Alliance to push for immediate action on electricity supply constraints and rising power costs as the province’s demand grows rapidly.
The alliance was formalized through a commitment signing led by Gov. Pamela Baricuatro and Energy Secretary Sharon Garin during the Cebu Energy Summit at the Cebu Provincial Capitol on Monday. Organized by the Cebu Chamber of Commerce and Industry (CCCI) and the provincial government, the summit brought together regulators, grid operators, generators, distribution utilities and local governments.
The initiative seeks to turn mounting business concerns into coordinated measures to improve power reliability and affordability, with particular attention to micro, small and medium enterprises (MSMEs) struggling to absorb higher operating expenses.
Garin said Cebu’s electricity demand is increasing by about 14% annually, more than twice the roughly 6% growth recorded in other parts of the country.
“We don’t want Cebu’s economy to slow down because of electricity challenges,” she said, stressing the need to address immediate supply shortages while accelerating investments in generation, energy storage and transmission infrastructure.
Business Industry Concerns
Data from the National Grid Corp. of the Philippines (NGCP) presented during the summit showed Visayas electricity demand at 1,229 megawatts (MW), against generation capacity of 863 MW.
Power interruptions have disrupted business operations and raised costs as companies resort to generators and backup systems. Smaller enterprises are particularly vulnerable because they have fewer resources to maintain alternative power sources or absorb sudden increases in electricity expenses.
CCCI plans to prepare a position paper outlining the business sector’s concerns and recommendations. Bernard Vonn Sia, the chamber’s vice president for business mobilization, said sustained engagement would be necessary to translate commitments into concrete results.
The alliance also marks a shift from previous power summits organized by the chamber in March and June 2026, which were driven largely by private-sector advocacy. The new platform is intended to bring government agencies and industry stakeholders together for coordinated action.
Sia said the chamber plans to hold quarterly engagements to keep Cebu’s electricity problems on the agenda until meaningful solutions are delivered.
Supply Upgrades Targeted
Garin said the simultaneous shutdown of several power plants had exposed the Visayas grid’s vulnerability. Although some generating units have returned to service, the region faces additional risks from El Niño and higher demand during the summer months.
For immediate relief, the Department of Energy (DOE) is pursuing the deployment of diesel-fired power barges with a combined capacity of nearly 300 MW across the Visayas. The units could become available as early as the first quarter of 2027, subject to refurbishment, logistical requirements, contracts and permits.
Garin described the barges as temporary measures intended to support the region over the next three to five years, rather than permanent solutions.
The DOE is also pressing NGCP to accelerate improvements to transmission links connecting Luzon, Leyte and Cebu. Additional generation elsewhere would not fully ease the shortage if transmission constraints prevent electricity from reaching the province.
Participants cited the long-delayed expansion of the Luzon-Leyte transmission link, with an existing capacity of 440 MW, and the Leyte-Cebu connection, reported at 250 MW. A proposed additional 440 MW for the Luzon-Leyte link has yet to materialize.
NGCP said it was coordinating with power sources in Luzon and Mindanao to augment Visayas supply, potentially helping limit yellow and red alerts through December if the projected capacity becomes available and generating units remain operational.
The DOE is likewise pushing for about 250 MW of battery energy storage systems across the Visayas, including Cebu, Bohol, Leyte and Iloilo. These facilities could store excess renewable energy produced during the day for use when demand rises, particularly at night.
Longer-term measures include proposed Cebu generation projects: a 150-MW coal-fired plant targeted for 2028, another 107-MW plant expected in 2029, and about 500 MW of gas-fired capacity with initial delivery projected between 2028 and 2030. Developers have also projected about 470 MW of additional renewable energy capacity in the Visayas by 2028.
However, Garin acknowledged that these projects would not immediately resolve supply constraints in 2026 and 2027. The DOE is developing a Visayas Master Plan that envisions the region’s major islands as interconnected subgrids, with Cebu’s longer-term energy security target set for 2031.
Market Costs Under Scrutiny
The DOE is also considering referring to the Energy Regulatory Commission (ERC) the possible suspension of the reserve market after sharp increases in reserve-service prices during recent supply difficulties. Garin cited instances when prices that had previously been around ₱10 rose to ₱20 and, in some cases, ₱30. The department has also referred concerns to the Philippine Competition Commission.
Garin urged NGCP to expand its contracting of ancillary services, which help maintain grid stability, rather than relying excessively on the reserve market. She also called on distribution utilities to review their power procurement portfolios and exposure to the Wholesale Electricity Spot Market, where prices can surge when supply is tight.
Distribution utilities were further urged to reduce system losses through better metering, infrastructure improvements and stronger enforcement against electricity theft.
Meanwhile, the DOE called on households and businesses to reduce consumption while new capacity is developed. Garin said cutting electricity use by 10% to 20% could ease pressure on the grid, recommending measures such as switching off unused appliances, setting air conditioners at around 24 degrees Celsius, and considering rooftop solar where practical.
Source:
https://tribune.net.ph/2026/10/06/el-ni%C3%B1o-could-squeeze-power-supply-raise-rates