Transparency in electricity billing wanted in Dominican Republic - Business groups want more transparency when it comes to the real costs of generation and power distribution, according to Lisandro Macarrulla, president of the National Business Council (Conep) and Manuel Diez Cabral of the Association of Industries of the DR (AIRD). Yesterday the Central Bank published the government's letter of intent sent to the International Monetary Fund (IMF), where it reveals an increase in electricity tariffs could be forthcoming.
In the IMF letter of intent, the Fernandez government announced it was up-to-date in obligations with electricity generators but foresaw once again having to resort to increasing tariffs to consumers who pay for the service in order to subsidize inefficiencies in the system.
Diez Cabral says that he would like the application of the technical tariff to be combined with other measures contemplated in the Electricity Law, such as the authorization of non-regulated users. These are consumers who can make significant savings by buying power from the grid and not from power distribution companies.
In the letter, the government stated:
"The Government will implement a more flexible pricing mechanism for electricity tariffs with a view to adopting a "technical tariff"(which will cover the cost of generation, transmission and distribution, and the efficiency losses in the system). As an intermediate step, the government will gradually eliminate the gap between the current tariffs and the "indexed tariff" (which covers existing generation costs) as published by the Superintendence of Electricity, starting in the second half of 2010, with a view to eliminating the gap by the end-December 2010 (structural benchmark).
" The electricity distribution companies (EDEs) will increase the number of their regulated clients by about one-third from 1.4 million in 2009 to 1.9 million by end-September 2010 (structural benchmark); this would entail attaining a (redefined) Cash Recovery Index (CRI) of about 70%, which takes into account the customers in former PRA areas".
Celso Marranzini, executive vice president of the Public Electricity Corporation (CDEEE) is optimistic the CDEEE will achieve the goal of 1.9 million paying customers and incorporating 50,000 to the Bonoluz program for the very poor. He told Listin Diario that the present 1.4 million consumers who pay for the service could expect price increases as of June 2010, after the May election. He said he is awaiting recommendations from World Bank specialists.
Marranzini called for more support from the Superintendence of Electricity. He complained that several cases for fraud in process have been left in the air by the Superintendence.
Pedro Perez, president of the association of malls (ONEC) doubts the timing for an increase is the right one. He said the economy is still recovering. "The current tariffs are very high. The easiest solution is to raise the tariff," he said.
Manuel Cabrera, president of the Association of Industries of Herrera said that there would not be solutions while the sector is subsidizing 50% of power served. "We cannot continue to keep the electricity sector as political booty," he said.
Economist Gustavo Volmar writes in Diario Libre rejecting the decision to increase the electricity rates. He says this will reduce the competitiveness of our exports, affect the viability of our companies, especially small business, increase inflation that is estimated at 6-7% for this year, higher than that in the US, Japan or Europe, our main trading partners, which will depress the peso, and it will stimulate more evasion of paying for the service.
To read the English version of the letter sent to the IMF, see
Go back | Date: 31 Mar 2010
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