CUSTOMERS of the Visayan Electric Co. (Veco) may face two power rate increases this year.

This, after Veco said it will pass on to consumers the P78-million cost of implementing an underground cabling project from the Cebu Provincial Capitol to Fuente Osmeña Circle, as well as the cost of buying power from the now privatized Unified Leyte Geothermal Power Plant.

Appearing before the Cebu City Council yesterday, Veco Chief Operating Officer Sebastian Lacson said the power distributor is buying 120 megawatts of power from Leyte, which composes 30 percent of its supply.

In the previous set-up, Lacson said, they bought the power for P4.56 per kilowatt hour (kwh). But since Unified Leyte has been privatized by the Power Sector Assets and Liabilities Management Corp., he said they are expecting the price to go up to P5 per kwh.

Asked by Councilor Alvin Dizon how much the increase will be for an average consumer, Lacson said they can expect to pay an additional six centavos per kwh.

An average consumer, he added, consumes 200 kwh per month, which would mean an additional P12 in their monthly bill.

As for the underground cabling, Dizon asked how each consumer can expect to pay.

Lacson explained they will only be paying one-tenth of a centavo per kwh. For an average consumer who uses 200 kwh per month, that would mean an additional 20 centavos in their monthly bill.

“It’s very minimal,” he said.

Lacson explained that the payment for their underground cabling project was minimal since the utility company is allowed by the Energy Regulatory Commission (ERC) to amortize their capital expenditure for a long period.


The underground cabling will be amortized for 20 to 30 years, as it is also the lifespan of such projects, he explained.

Dizon, who called for the public hearing yesterday, then asked Veco why the power distributor can’t shoulder the expenses incurred for their underground cabling and make it part of their corporate social responsibility projects, as earlier suggested by Mayor Michael Rama.

Lacson said the project is part of improving their distribution lines and ensuring that the delivery of power to the consumers is unhampered.

“The power supply will become more reliable. It will no longer be prone to interruption, vegetation or typhoon. We will have a more robust distribution network.

Aside from that, the trees along Osmeña Blvd. can already grow to its full potential since we will no longer be trimming them,” he said.

The Consumers’ Right for Economic Welfare (Crew) Inc., who also appeared during the public hearing, expressed opposition to the impending increase in power rates.

“What they want is for consumers to just swallow everything that they throw to us and as a consumer group, we find it unjust,” said Engr. Elias Sabang, who heads Crew.

The Freedom Debt Coalition, for its part, is also opposing the increase.

“With the high cost of electricity, it is already a very big loss to the ordinary citizen. Businesses are also affected since they pay much for their electricity, so much so that they cannot even give minimum wage to their employees,” said Teody Navea.

Asked when the power rate increase will be implemented, Lacson said there is no definite schedule yet as it will depend on when ERC will approve their petitions.