2004News

Covert agreement with generators

Hoy newspaper’s economic editor, Mario Mendez, says that those in the business sector who generate their own power as authorized by the Electricity Law and the Hydrocarbons Law are alarmed regarding an as-of-yet undisclosed agreement the government signed on 11 February with the major power generators. The agreement purportedly would promote the elimination of tax exemptions on the import of fuel by these companies for their power plants, while this exemption would be kept for the companies that generate energy as their sole line of business. The concern is that the taxation would render the generation facilities installed by 53 Dominican companies non-competitive. The companies say the installations represent an investment of around US$240 million and that they have installed 200 megawatts given the high cost of power from the major suppliers, so as to defend their own business interests. Laws in place establish that companies generating their own power are entitled to exonerated fuel. According to the story in Hoy, the revision in the law would continue to respect the rights to exonerated fuel of foreign companies, regardless of their line of business. Dominican companies, however, would be excluded.