On the WESM

 from the facebook post of Rod P. Kapunan

Many distribution utilities now feel they were conned to enter into an agreement to purchase electricity under the traded system operated by WESM much that the system of "open" trading divested them of their right to control the price of their commodity. It is now the traders of electricity that dictate their price under the privately created Philippine Electric Marketing Corp. (PEMC). The sponsors of the Epira Law, like Speaker Feliciano “Sonny” Belmonte and his greedy cabal, lost their basic common sense that under WESM the distribution utilities would be reduced to mere buyers of the commodity. As in all economics, even in the economies of most primitive societies, it is usually the seller (independent power plant operators) that dictate the price, and often the buyers (distribution utilities) only have the option to take it or leave it. With that rule , the Belmonte and his gang in effect reduced the ERC to that of a scarecrow.

By participating in that modern day gambling called WESM, the supposed wholesalers or producers of electricity represented by the IPP operators effectively lost control in fixing the cost of their commodity at a price they are willing to sell. They became dependent on the traders organized by PEMC leaving it to them to negotiate the commodity at a price they are willing to sell, and usually at the expense of the producers. If the cost would favor the buying distribution utility, traders would do so only if they are assured of their commission. In which case, the role of the ERC became anachronistic much that regulation can never co-exist alongside with the system of a "open" trade. It is not the market forces that is at work, but a syndicated cartel, which reason why the producer-sellers and the distributor-buyers of electricity never really incurred loss. Only the consuming public. That is how the economic hitmen from the World Bank successfully conned us.

The beauty of it is, as PEMC continues to jack up the cost of electricity per kilowatt hour, it is able to get away from any responsibility or liability because their existence is not provided in the Epira Law nor is guided by it. (rpkapunan@gmail.com)