The Superintendence of Electricity recently announced an increase in electricity rates on the grounds of a deficit. This was later revoked on President Danilo Medina’s orders. Dominican electricity expert Bernardo Castellanos say that the reasons for the deficit are excess staff and current expenses and he challenges the reasons given by Superintendent of Electricity for ordering the increase.
Castellanos says that as of May 2013, data published by the Public Electricity Corporation (CDEEE) indicates that the aggregate value of distribution, with EdeEste averaging around US$0.06 per kilowatt hour in the first five months of the year, which he says is double that of a power distribution company that operates without excessive staff numbers and current expenditure. He said that the government subsidy of US$1.05 billion in the 2013 National Budget is not on consumers, but rather on the “inefficiency, incapacity, bad administration and excess of employees and current expenditures of the power distribution companies, the Public Electricity Corporation and is used to cover the losses of bad contracts signed by the government with the Smith Enron and Congentrix power plants.”
Castellanos says that if the government and SIE chose to apply an indexed power tariff, the VAD would be around US$0.09/kWh, triple that of an efficiently managed energy distribution company. He stressed that the financial deficit of the energy sector is the result of high total losses (the difference between the energy purchased from the generators and revenue collected from clients) that the distributors have, which is around 40%, excess employment and current expenditure.
www.diariolibre.com/economia/2013/09/07/i401294_dicen-que-subsidio-los-consumidores.html