Nothing is new. The electricity shortage in the Dominican Republic is far from over. In the past four years, there has been a de facto privatization of the generation of power in the Dominican Republic in response to the reluctance of the government to invest in power stations. More than 40% of the electricity generated is produced by private companies that sell it to the CDE.
But one of the main problems behind the present crisis is that while private companies are generating the power and charging the CDE directly, the government corporation continues to supply millions of consumers with a free service.
Engineer Amilcar Romero of the CDE says that the government only bills 50% of the electricity consumed in the country. Thus, the CDE requires heavy government subsidies and when these do not appear it cannot meet its commitments to the private suppliers who are resorting to disconnection from the CDE to pressure the latter into settling accounts.
Last week, the 185 megawatt Smith-Enron power station in Puerto Plata disconnected for this very reason. Other suppliers are putting the pressure on the CDE, during a time when the Balaguer administration’s priority is to finish the many public works underway before ending his term, such as the widening of the Autopista Duarte and the completion of the new Plaza de la Salud.
Amilcar Romero has advised Smith-Enron to draw the US$4.5 million debt from the US$24 million standby letter of credit issued to the company to guarantee the operation. The administrator of the CDE says the final decision to pay the outstanding bills is in the hands of President Balaguer.
As of Wednesday, 3 April, the CDE was supplying 820 megawatts, of which 665 megawatts were produced by its own generators and 155 by private generators. The normal demand on the CDE is 1,350 megawatts, and the joint production of the CDE and private sector is 1,250 megawatts. The conflict is now causing a deficit of 420 megawatts, as the independent suppliers have dropped their production by 35%.
Meanwhile, the newspaper Hoy has continued a series of reports on the CDE which have evidenced that it is an administrative disaster with widespread corruption. In its 3 April edition, the newspaper reported on how officers of the company are trying to be excluded from investigations on millions of pesos of computer frauds in the commercial department of the state utility. The newspaper has revealed that industrial utility bills are sold for 27% of their value. The newspaper says that the National Police is still waiting to receive documentation on major frauds that have benefited companies with monthly bills of over RD$500,000.
On the other hand, the Asociación de Suplidores de Materiales Eléctricos, that represents importers of electrical supplies, says that the present crisis is due in part to the obstinacy of private electricity generators that have placed obstacles to the approval of the energy bill at present in Congress. The ASUME goes on record saying that the generating companies felt that by negotiating directly with the CDE they could maintain their tax exemption privileges and concessions. ASUME favors the privatization of all phases of the energy industry.