2004News

The energy crisis explained

Although it might seem like pouring gasoline on a fire, Hoy dedicates two full pages to Superintendent of Electricity George Reinoso and his explanation of the current energy catastrophe that has plunged the country into a situation previously unseen. Participating at the Corripio Gruop Monthly Luncheon, Reinoso touched on several topics related to the crisis: private ownership of the generation and the distribution of energy; high oil prices causing serious problems; lack of short-term solution to the crisis; the real demand for energy is unknown; and the differences between Ede-Este and the government. Talking with Manuel Corripio and Miguel Angel Velasquez Mainardi, the electricity official said he was in favor of handing the distribution and production of electricity to the private sector, with the government maintaining the transmission lines and hydroelectric generators. Reinoso also said he would choose a scenario whereby the government serves as a regulator and policy maker, and the private sector handles the production and distribution of the energy. He pointed out that the distributors are working hard to eliminate fraud, but the blackouts hinder their work. He voiced his displeasure with the fact that EDE-Norte had 100 people on a VIP list who were not charged for the energy they consumed. Referring to the price of fuels, the Superintendent of Electricity said that the recent price increases to the cost of a barrel of petroleum have made the situation unbearable for the Dominican Republic, and most of Latin America as well. With only 10% of the local energy produced in the hydroelectric system, the DR is heavily dependant on oil for its electric generation. He pointed out that even in places like Florida, in the United States, where nuclear energy and coal-fired energy plays a very important role, the cost of a kilowatt has risen from US$0.072 to US$0.096 because of global price hikes. At this point, Reinoso touched on yet another important point: ?We also have a disadvantage with regard to other countries, in that they have a collection rate for electricity service of between 95% and 98%, and we have never found a way to get our collection to 75% or 80%.? Compounding the situation even further, Adolfo Fermin, the marketing manager for the Superintendence, said that when the distributors were privatized there were 800,000 existing clients and now there are 1.05 million. Reinoso said that an electricity consumer was not the same as an electricity client, since there were many, many people who used electricity without paying for it. To the superintendent, the dearth in collections is the chief cause for many of the problems being suffered by the population today. Instead of a 45-day delay in payments, the average delay is now up to 90 days, and the collection rate is as low as 40%, according to some published reports. Reporter Ubaldo Guzman Molina says he and colleagues left the monthly luncheon more confused than before. One of the points of confusion was the fact that Reinoso said his office does not know how many megawatts (MW) constitute the real electric demand for the Dominican Republic. He pointed out that when there has been an abundance of energy, demand has reached 1800 MW, but he also pointed out that according to a study by the National Energy Commission, there is between 250 MW and 300 MW that is not on the national grid, and only 75% of the country has access to electricity. As a sidebar to the story, Hoy reporter Fior Gil publishes a note that says the country has at least 200 hydroelectric projects waiting to be developed, and Rene Jorge, Jaime Felipe, and Heriberto Andujar have prepared 30 projects that are waiting for financing.