Utilities & Mobile Noreco II rates September 2026

Today, the WESM (Wholesale Electricity Spot Market) information regarding the average traded market price for electricity in the Philippines in August was released.
The numbers for the Visayas grid are truly alarming, the WESM average price rose from P11.29 for July to P18.59/kwh for August, an increase of P7.3 per kwh.
It's a bit complicated, but because Noreco II relies on WESM for about 40% of the electricity they buy, the rise in the (variable) WESM rate translates for 40% in the generation rate that Noreco II charges its customers.
The remaining 60% Noreco buys at fixed contractual prices from GreenCore Geothermal Inc. and from FDC-MPC, a company with coal-fired plants.
If I understand correctly how it works there is roughly a 1 month delay in the effect on the Noreco rates, so the increase will have effect in September.
That would mean that Noreco customers could expect another increase in their electricity rate for September of at least 3 peso per kwh so an increase from P15.1 to P18 or so.
We'll see how people are going to react if I'm correct, but the uproar after the August increase doesn't do much to calm my expectations.

When it comes to the causes of the WESM price movements it is clear that the spot market (buy/sell for instant delivery) is dominated by suppliers who can quickly adjust production, which basically means those running on the most expensive source of fuel, so oil and LNG, because the other suppliers (coal fired, hydro, geothermal) are already producing at maximum capacity. Other factors are the cable capacities that allow transport of electricity from/to other regions (Mindanao and Luzon).

 

People are going to be screaming bloody murder.

I follow an FB page. It's called Noreco II users (blahy blah). In my mind it should be called the "I Hate Noreco group". Some people on the site understand that some company generates the power, another transmits the power and Noreco distributes the power. Others don't seem to grasp the concept or don't want to understand. Their electric bill says Noreco on the top so any problem is Noreco's fault. I think it's fair to say a lot of people are ignorant (some willfully) and will not understand the concept of a spot market. People cry when there is a brownout for preventative maintenance by Noreco or NGCP and when there is a brownout due to a failure they scream "lack of maintenance". Some folks just can't be pleased.

There have been reports (not confirmed) that Noreco employees have been threatened. To me threatening a Noreco employee makes about as much sense as yelling at the gas station guy because of the price to fill my car.

I feel sorry for the people that are struggling with higher food cost, fuel prices and now energy costs.

 

I agree with what you say, making threats against Noreco staff is ridiculous.
And yes, there's still plenty people in this country who struggle financially and they are disproportionally hit by inflationary pressures.

That doesn't mean that the Noreco policies are all that great though.
1. When things on the production side have been going in the wrong direction for at least the last 6 years or so, with ever more electricity plants failing / going on "forced outage",
then as a distribution utility you'd be smart to contract a higher percentage of your electricity need at a fixed rate instead of relying on a potentially volatile spot market.
Of course Noreco can't predict with any certainty how much electricity will be needed longer term (economic growth) or short term (the weather being a major factor in that), but the unpredictable part of electricity demand is definitely not 40%. Obviously though, it's too late for that now, that ship has sailed.
2. At least part of the "system losses" relate to the Noreco side of business. It's related to proper (unavoidable) system losses both on the NGCP and Noreco side but also to unpaid customer bills and stolen electricity. It's up to Noreco to minimize those last two. Prepaid electricity for consistent lousy paying comes to mind.
3. I am not entirely sure but I think that also the "low voltage issue" (which is a thing in remote areas more so than in Dumaguete it seems, but potentially damaging customer appliances) is a Noreco responsibility.
4. I have often said that while labour in this country is still cheap it would make sense to start digging in urban areas and put the electricity lines underground and transformers in little buildings purok by purok. It would get rid of the spaghetti above the side of streets and eliminate/lessen the weather- and vegetation related blackouts. Short term expense for long term gain it seems to me, but apparently most electricity cooperatives are not interested. They could even share the cost of the digging with internet providers who wish to keep serving their customers after the poles have gone.

 

To make things even worse with regard to the price per kwh going forward, if I read correctly the standing contract that Noreco II has with FDC-MPC will expire in October 2026.
At the very least I would say it's not a fortunate time to renegotiate the price per kwh with a coal fired electricity plant, with the price of coal having risen around 45% in the past year.

 

Admittedly I'm not too up on the workings of WESM. I suspect that NORECO2 buying from four different producers is a hedge against a loss of production from any one or more of them due to periodic maintenance, typhoons, stupid wars, ETC. Buying 40% (17,558,810 kwh for August 2026) from from MESM does seem to be a bad hedge. When I looked at Greencorp geothermal production capacity I see the Palinpinion plants alone are and historically have been producing more than enough to not need WESM. The WESH base rate of Pp11.6189 per kwh. compared to the Greencorp base rate Pp6.5275 per kwh. is not a fault of NORECO2 lineman. So who decided to hedge some with WESH is the question I don't know the answer to. Is NORECO required by law to purchase a percentage from them or was it just an ill timed choice by NORECO's board of directors.
Palinpinion 2025 yearly production was 1,389.7gwh or 1,389,700,000kwh. Dividing that by 12 months gives a monthly production of 115,808,333kwh. According to NORECO2, they purchased a total from all their suppliers 45,720,040kwh for August 2026.

 

You're right Mike, Palinpinon alone produces plenty electricity for all of Negros Oriental even. However, all electricity cooperatives from the Visayas combine their electricity contracts negotiating and purchasing, because together they have more negotiating power. That's one reason why Noreco can't say: we'll buy all our electricity from GreenCore. The other reason is that demand for electricity isn't a stable number, there's seasonality, there's the day/night difference, weekdays/weekend difference and weather dependency (the hotter the more aircons will run and consume). Longer term, it's hard to predict additional demand because of economic growth.
If Noreco would buy enough/all of its electricity under a fixed contract then they would have excess electricity at times when demand is lower, because those contracts don't just have a price but also volume agreements.
Right now excess electricity would not be a bad thing, with the spot market prices being so high, but at other times they might be forced to sell their excess at a price below what they pay for it.
Guess who would end up paying the difference then.
So yeah, they have no choice but to depend to some extent on the spot market (WESM). My argument is that that doesn't need to be 40%.

 

As it turns out, the ERC (Energy Regulatory Commission, a government entity) on September 10 ordered a revision of the WESM prices to be charged to Electricity cooperatives in the Visayas and Mindanao, effective retroactively for the month of August. This means that the further price increase per kwh for consumers that seemed imminent will not materialize in September.
The question remains though whether this decision means that the electricity plants that sold this electricity in August will not be compensated for their cost.
Government entities forcing prices on the market sounds nice, until such actions would cause the market to collapse by producers withdrawing altogether.

 

I don't want to under value the pain to all what a collapse to the market would cause but... Qué Será, Será If the only way WESH can make ends meet is to charge 66% more than net metering then maybe they should be slapped back into line, or fail.

I don't believe they sold it at cost. Perhaps they will lose some of their cost. Perhaps not. Perhaps it will all be lost profit.

 

WESM is probably best compared to Wall street (the exchange). It's a bit strange to blame that institution for the price at which electricity trades, unless its regulations don't prevent sellers to conspire to break fair market pricing. To be fair, precisely that, irregular agreements between producers, is what the ERC suspects.
Obviously, such agreements only make sense because the buyers (the electric cooperatives like Noreco) don't have a choice, they must buy if there's a shortage of electricity in their grid.