While everything that Dolores is quite accurate-it always is
Let me add that there are other sides to this problem. It is the government's fault. They screwed the country when they paid off all the depositors of BanInter. That is a major and very key point. We all got screwed. Our pesos lost buying power, plain and simple.
Now understand this: The generators all sell electricity of , let's say 7? of a dollar per kilowatt. The electricity distributors-Ede Este, Ede Norte and Ede Sur all sell power at , let's say twice that price: 14? of a dollar.
BUT their bills are in
pesos!!!! When the value of the peso crashed, the electricity distributors were never able to adjust their invoices to keep up with the rapid inflation, and when they did bill at a current rate, everybody yelled so loud that the "Government" is another stupid move, re-purchesed the distributors Norte and Sur at terribly inflated prices and caused another cascade of events: People started saying; "Oh this belongs to the government, so I don't have to pay" or "I am a poor father of a family so I do not need to pay for my electricity" and so on and so forth. Collections that had hit 85% and 90% in some cases fell to less than 60% very quickly and stealing of electricity became the game of the day.
SO: We have pesos that cannot pay for the electricity the distributors have to purchase in dollars, we have people delaying payment or not paying at all (if they are PPH, they never pay!) and power companies facing ever increasing oil costs overseas, and continuing default on invoices. For example: EDE Norte "purchases about $25 million in electricity every month (if it is there to be "purchased") but they only collect between $12 and $14 million from their clients. That is a +/- $12 million deficit every month to the generators. WHo can keep that up?
Then there is the case of the government trying to keep on the good side of the "hot" barrios by trying to subsidize electricity so there are fewer prolonged blackouts in the most populated and politically dangerous areas. And this at a cost of around, what was it I read??? Like RD$600 million a month?? Something like that. No way they could keep it up, so they didn't.
And then you have the CDEEE which owns a few generation facilities and all of the transmission lines. They never get paid for what they do either, so maintenence is schitty at the very best and the hydroelectric plants are each and every one of them producing far, far less than they are capable of doing.
And not the last one by any but this post has to end soon, we have those excellent contracts engineered by Smith-Enron and Cogentrix in SPM. Those contracts were passed as laws and are unbreakable. They provide for payment for "installed capacity" in case the plants are shut down for any reason. Since the government hasn't been able to pay, nor the EDEs been able to pay, they shut down but still collect a ton of money--at least on the books. Some sources say that Carlos Morales Troncoso was the godfather for some of these and collects US$10k a month just from Cogentrix--might be rumor but is makes sense in this environment.
See why things are all screwed up??
HB
but oh so
with our little " plantica"