President Danilo Medina accepted the challenge of resolving the Dominican Republic’s electricity problems by the end of his term in August 2016. He said his government is investing more than US$2 billion for this purpose. As reported in El Dia, President Medina believes that the two coal-fired generators sponsored by the government to increase generation will make the difference in tackling the high cost of generation. Medina made the comment during a visit to dairy farmers in Luperon, Puerto Plata yesterday, Sunday 2 February.
Meanwhile, the Electricity Industry Association (ADIE) said that in 2013 the power distributors purchased power from the generators at a price of 16.64 US$ per kilowatt/hour and sold it for 19.39 cents, with a profit margin of 2.75 per dollar per kilowatt/hour sold.
As reported, EdeEste purchased power at an average price of 13.30 and sold for 18.90, Edesur purchased at 18.09 on average and sold for around 20.35 US$ cents, and Edenorte purchased an average of 18.65 cents of the US and sold for an average 18.75.
The companies say that 60% of the power purchased was generated by water, coal or natural gas, according to executive vice president Milton Morrison in a press release from ADIE. Morrison says that the authorities should be more transparent about the reality of the problem.
“The public should know that while it is true that power should be generated using lower-cost fuels, it is also true that the principal problem is in the distribution that has sustained losses in the past 13 years that do not go below 30% because of deficiencies in the management that become losses,” he said.
He said there are inefficiencies in the power distribution companies and that there is a need to “invest heavily in reducing distribution losses to optimal levels so that the system can be sustainable. There is inefficiency in the distributors, which need to be made efficient, both at a management level as well as in the cash flow. If the distributors do not collect then the system collapses financially and that is the reason why there is such a large electricity subsidy.”
ADIE has expressed its concern that the government has accumulated up to six months arrears in payment with the generators.