2005News

EDEs asking for even more money

While the IMF teams are looking over the books, the electricity distributors are asking the Government for an additional US$116 million in order to complete the electricity subsidy. This would be in addition to the US$350 million already on the table and approved by the IMF. Rising oil prices are given as the basis for the request. Meanwhile, metropolitan Santo Domingo suffered another blackout when Itabo II and Haina II both went off line, taking their 150 megawatts with them. The system has still not recovered from the three prolonged blackouts that occurred last weekend. The negotiating team of Fernando Filpo and Rodolfo Cabello presented an evaluation of oil market trends and price increases over the last several months. Rising oil prices have increased distributors’ bills by 50%, according to the negotiators. The team also requested the complete restructuring of the electricity sector’s general recovery plan with the World Bank and the IMF. The government had promised to reduce the deficit produced by the government’s support for electricity consumers in economically depressed areas from US$650 million down to US$350 million. In April, according to the paper, President Fernandez announced a US$100 million addition to the subsidy program, but it was never disbursed, and of the total US$350 million that was agreed upon, there is only US$75 million left to be paid out. The unbalancing of the subsidy program is attributed to the rising cost of crude oil. When the program was initiated, crude prices were around US$37 per barrel, but current price quotes put the cost of a barrel at almost US$66.