2003News

The costs of subsidies

The subsidy implemented by the government in March to soften the blow of the proposed 20.4% hike in electricity bills reportedly cost the government RD$140 million. That is the amount the EDE electrical distributors will be billing the government to cover their March invoicing. Estimates reveal that the government will pay EdeNorte and EdeSur RD$100 million pesos [each?] and RD$40 million to EdeEste. Because of the elevated cost of oil, the plunging peso and the supply problems in Venezuela, Dominican electricity rates reached all-time highs in February and March. To combat the financial burden the lofty rates would impose on the middle classes, the government agreed to subsidize 100% of the price hikes for those consuming less than 300 kWh per month and 50% of the additional costs for those consuming larger amounts. On Monday, Power Superintendent Julio Cross told the press that the proposed 6.5% increase in the cost of electricity would be reduced by half under the same program.