While oil pricing is deregulated, electricity pricing is a regulated energy commodity. The price for electricity is set by the Energy Regulatory Commission (ERC). Alongside the implementation of the EPIRA is the unbundling of electricity rates.
The individual charges for providing specific electric services to any end-user, for generation, transmission,distribution and supply, are identified and separated.The ERC determines the rate-setting methodology taking into account the relevant considerations that will enable a specific entity to operate viably, with the end view of providing a reasonable price for
electricity. Part of the EPIRA law is the birth of the Wholesale Electricity Spot Market (WESM) which serves as a venue where electricity made by powerproducing companies is centrally coordinated and traded like any other commodity in a market of goods. After several months of trial operations, in June 2006 the WESM started commercial operations
in the Luzon grid. Four years into its commercial operations in Luzon, the Visayas grid was integrated into the WESM and it commenced commercial operations in that grid in December 2010. The establishment of the WESM creates a level playing field for the trading of electricity among WESM participants; hence third parties are granted access to the power system. Although prices are still governed by commercial and market forces, customers may have the option to buy energy at a price lower than the regulated rate (WESM, 2012).