Since the remarkable deterioration in the energy supply in the entire country over the past week, Pedro Silverio, the head economist at the Cenantillas economic think-tank, wrote in yesterday’s El Caribe about vertical integration of the electricity sector. His point is that such integration is not necessarily the best thing. The term “vertical integration” is in the first place, he says, a term used in industrial organization, and is not exclusively a technical process. As a point of departure, Silverio says that the electricity distribution should be kept separate from the electricity production from a financial point of view. This avoids problems in one sector becoming indistinct from the other. The integration would only serve to hide a problem of one or the other processes. On the other hand, vertical integration would severely limit competition within the sector. In the DR at the present time, the distributors hold geographical monopolies and any integration would mean that the monopolies would spread to the generation of energy. The argument that vertical integration would generate economies of scale, according to Silverio, is not valid, as production levels do not have to be affected by integration, unless, of course, a reduction in the number of electricity generators is effected and the monopolistic aspect becomes more of a reality. In practice, the DR has experimented with vertical integration, although in small markets with few customers. The results are not clear, but higher energy prices are a certainty. The Cenantillas economist warns that if such a scheme is transferred to the large urban areas, where there are millions of customers with varying degrees of income, the problems of an equitable distribution of energy would be so numerous as to absorb a huge amount of energy from the generators as they try to satisfy millions of clients with different propensities of payment. As a final point, Silverio reminds the reader that the best producer is the best salesperson, and that there is always a tendency within the market to push economic players towards specialization in what they do best. This is why the distributors of electricity are such an important bridge between the producers and the customers.