Clients that consume more than 700 kilowatts in power per month have had to subsidize the technical losses and administrative deficiencies of the power companies, Francisco Mendez, Superintendent of Power and Jose Luis Moreno San Juan, of the Power Institute of the UASD, told the Listin Diario. The same mechanism of subsidy has served to relieve the government from carrying its share for those who do not pay, which includes several government departments.
Mendez and Moreno admitted to the structural distortions in the electricity sector, due to the low level of collections, high levels of losses and financial incapacity of the distribution companies.
Moreno San Juan considers that the problem with the power rate in the DR is that the non-technical losses are more than 25%, which is reflected in the high billings to those that have traditionally paid for the service.
They explained that the basic rate to residential consumers is US$0.18 the kWh, when it should not be more than US$0.12. The difference is used to subsidize those who do not pay.
Moreno San Juan said that the Madrid Accord is another major distortion, especially in the prices that it establishes that the distributors buy power to the generators. Moreno believes that the price that distributors should be purchasing power from the generators should not be more than US$0.07.