El Siglo newspaper reports that the government will have to disburse RD$283 million a month to subsidize the electricity system. This is RD$80 million more than what was paid out prior to the privatization of the state electricity utility (CDE). Of the total sum, RD$50 million is assigned to the CDE that is picking up the difference in the price of the kilowatt sold to the private distributors for resale to consumers, and what it pays to the private generators. The CDE is honoring the above market prices negotiated by private generators that signed contracts during the Balaguer governments. An additional RD$80 million goes to pay for 42% of the increase in the indexing of the rates to consumers and RD$153 million is assigned to pay for government institution electricity bills. This means RD$3,336 million a year in electricity subsidies need to come out of the National Budget. The government also announced it is negotiating an agreement over the US$102 million the CDE owes to private generators. The Banco de Reservas would be involved in the transaction. Today, most of the blackouts are caused by the shutting off of private generators due to lack of payment on behalf of the government. El Siglo says that the government had expected some relief as new power plants went on line. For non-explained reasons, the operation of new plants has been delayed. These include Laesa (Pimentel, La Vega), Maxon (Barahona, Boca Chica), and Seaboard Santo Domingo for a combined additional 295 megawatts. The new power generators are expected to reduce costs for the government, as they are expected to sell power for less than the government is now paying to private producers that signed contracts during the Balaguer government. Meanwhile, the deficit in online generation is resulting in long blackouts, at a time when power bills are increasing. Lawyer David Lahoz, in an article in El Siglo defends the Fernández administration, saying that what has occurred is that while the opposition party-majority Congress passed the privatization law it did not pass the legislature that would have provided regulatory framework to defend consumers from abuses by the new companies. The Código de Ordenamiento de Mercado (marketing order code) and the Ley General de Electricidad (general electricity law bill) are still sitting in Congress. This has left the government with little maneuvering capacity to oversee what the private power distributors operations, despite the state retaining 50% ownership of these companies. Meanwhile, this month thousands of users have seen doubling of their electricity bills, despite the announcement by the Superintendent of Electricity that only a 9% increase had been authorized to go into effect as of February billing.
