The high bills and the lack of a guaranteed service have forced many large electricity consumers to opt for becoming “non-regulated clients” and purchasing their electricity directly from the generators. And, according to Ignacio Mendez of the Federation of Industrial Associations and Elena Viyella de Paliza of the CONEP, this status provides the largest consumers 50% savings in their energy costs. With most consumers paying between 19? and 22? per kilowatt, the non-regulated clients get their electricity at 10? or 11?. The electricity market is divided between residential, industrial, commercial, government and municipalities.
In the cases of EdeNorte and EdeSur, 49.9% of their billings are for residential clients, 32.4% is for industry, 7% for commercial establishments, and government and the municipalities compose a bit more than 10%.
Juan Rodriguez, a spokesperson for EdeSur, said that if the 110 largest clients of the two distributors (EdeNorte and EdeSur) were to become non-regulated clients, their cash flow would be hit with a RD$314 million monthly decline.
Getting the necessary permission to become a “non-regulated client” has always been difficult. In spite of the fact that the General Electricity Law (125-01) went into effect years ago, only 46 requests for the privileged status have been okayed by the authorities. These are consumers that use more than 2 megawatts of electricity per month.
Currently, the Superintendent of Electricity, Francisco Mendez, has eleven requests on his desk from very large consumers and dozens more from somewhat smaller users. Although Mendez told reporters from the Listin Diario that there was no limit on how many very large consumers could hold the non-regulated status, at present, according to Ignacio Mendez (no relation) and Elena Viyella de Paliza, the Superintendence has a conflict of interest and has not been willing to approve new requests for the better status, in outright violation of the law. Article 108 of the GEL 125-01 establishes the status of those users of more than 2 megawatts as “non-regulated”, but the law also provides for the gradual reduction in the consumption requirements for the status this year that would benefit users of as little a 0.2 megawatts.
However, as Francisco Mendez points out, the smaller consumer will not be able to avail themselves of the privileged status because of the infrastructure costs involved, such as a private sub-station that will cost between 12 and 15 million pesos. As the CONEP leader pointed out, the largest consumers have the right to buy wholesale and save the costs of the distributors. At the same time the generators just love the large consumers since they pay their bills on time and this improves their cash flows.