Economists Jaime Aristy Escuder and Andres Dauhajre feel the administrator of the CDE César Sanchez and the Electricity Superintendent Jose Ovalles are to blame for high power rates consumers pay in the DR. Aristy accuses them of favoring the interests of the power companies over those of consumers. He criticized the Madrid Agreement signed on 9 October by the CDE, the power distributors and generators, saying it prevents consumers from benefiting from a decline in fuel prices. Electricity rates were frozen for the next 18 months. Economist Andres Dauhajre, director of the government’s Unit for Medium Term External Financing, feels the Madrid Agreement needs to be renegotiated because Sanchez and Ovalles awarded the companies an excessively high tariff in the negotiations. He said Dominican consumers should be paying a maximum of US$.09-.10 per kilowatt, and even less with the recent decline in fuel prices. He said it is abusive that they must pay US$.12 per kilowatt. Speaking on the Aeromundo TV program, Dauhajre said the power sector cannot expect a 30-40 percent annual return. “The government cannot and will not accept that,” he said on TV. He said those profitability levels were acceptable during the chaotic economic times of the 80s and 90s but not now when Moody’s and Standard and Poors have improved the country’s risk ratings. He says the power companies have to see their investment as long term, not one where they come in one day and leave the next. He urged creating a framework for competitiveness and ending the present exploitation of the consumer. “The problem is that up to now the Dominican consumer has been vilely exploited by the electricity sector and that has to be corrected. A firm hand is needed in the management, the regulation and organization of the sector,” he said. He said that the future of the electricity sector is promising but the government and the private sector should renegotiate the terms and create a framework that is favourable for development over the next 20 years. Meanwhile, Superintendent of Electricity Jose Ovalles defended the Madrid Agreement. He said the government was able to rid itself of its commitment to pay a RD$258 million monthly subsidy without increasing the tariff, there are no blackouts, and there has not been an increase in the tariff.
