Sunday, March 16, 2014

On the WESM and PEMC

 by Rod P. Kapunan

To make myself clear, when those despicable ones decided to trade our electricity dubbed as Wholesale Electricity Spot Market (WESM), it did not seep into their cranial lobe that both the producers and the distributors of electricity lost control by default the price for their commodity. Although they argued that trading could reduce the cost of electricity, their real motive was for the full deregulation of the industry. Since the power producers and the distribution utilities constitute a handful few because of the capital-intensive nature of their business, oligopoly, cartel and price-fixing was bound to happen.

In fact, they flagrantly violated the prohibited practice of cross ownership in the industry such that power producers could now operate their own distribution utilities, and in every phase of the industry they enjoy a monopoly. To legalize their price manipulation, they created a private corporation called the Philippine Electricity Market Corp. (PEMC), which is not even provided for in the Epira Law. Thus, while the trading of electricity was made legal through WESM, it was PEMC that formalized the cartel, and shielded the owners from suit due to price rigging.

The fiasco that resulted in the steep increase in the price of electricity, no doubt, was the handiwork of insider trading collaborating with some of the members of PEMC, something that could not have happened had they not been allowed to trade their commodity. Insider trading made a sham of their make-believe open competition supposedly designed to reduce the cost of electricity. The funny thing is that the cartel used as their spokesman a member representing the various industries when supposedly his duty is to oppose any increase much that industries, being heavy users of electricity, are the first to be affected by any price increase.

It cannot be said that the government did not connive with these people to rig the price because the chairman of PEMC is no less than the Secretary of Energy. But as usual, Secretary Jericho Petilla blamed the skeletal remains of the state-owned Napocor, now called Private Sector Assets and Liabilities Management Corp. (PSALM), for allegedly “failing to dispatch its energy load to WESM, thus resulting, he said, in the runaway hike in the cost for generation,” forgetting that he presides over the decision making of that semi-legal cartel syndicate that effectively substituted and reduced the Energy Regulatory Commission to a mere scarecrow to deceive the public into believing that electricity remains regulated.

To insulate owners from the adverse reaction of the public, it is believed they are using PEMC to fund some NGOs from the educational fund deducted from the consumers to justify their price rigging in a manner of frying consumers in their own lard.

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