Electricity rate hikes put on hold

President Luis Abinader announced a stop to the programmed increases in the tariffs of the government power distributors – EdeSur, EdeEste and EdeNorte. The President said he favors an amendment to the Electricity Pact ruling that calls for increases in the tariffs every three months to remove the electricity subsidy gradually. President Abinader said he would propose the change to the Economic and Social Council (CES) that coordinated the pact agreement.

While the increases should be under 10%, many households and businesses have complained of increases of upwards of 50% without more consumption. Some households and entities report a doubling of their power bills. This has caused resentment of many at a time when inflation is already at a recent record high. Most Dominicans are connected to the national electricity grid that the government power distributors serve.

The power increases come at a time when Dominicans have learned that the power distributors have been subject to major government corruption. Maxi Montilla, the brother-in-law of former President Danilo Medina is in preventive custody awaiting a trial on evidence of major irregularities in government procurement for the power distributors. Meanwhile, just this month, Somos Pueblo TV released a video showing major corruption in purchases in the government-owned EdeNorte power company. The EdeNorte head was appointed in the Abinader administration. After the news went public, the procurement contract was suspended.

“Given the current situation, we are going to stop the increases and this week we are sending a letter to the CES so that this pact, signed by all the political parties, be readapted to the circumstances of the international crisis we have today,” said the President.

He pointed out that the cost of natural gas, which represents almost half of the fuel used for power generation in the country, has tripled in the last year, as has the cost of petrol and coal. The Electricity Pact proposes the gradual adjustment of electricity prices to stabilize these to levels of international prices.

Likewise, the President said he understood the dissatisfaction with the current increases, even more so because more electricity is needed for the hot summer months.

“The increase should have been 8%. There is a higher increase and we understand it and we will try to mitigate it,” said the President.

“The important thing is that the government is going to review the pact in terms of subsequent increases. Therefore, we are going to go to the CES to readapt this pact with all the sectors that signed on,” said the President.

He mentioned the government has been subsidizing the electricity sector and fuels in general with more than RD$30 billion. He also mentioned that there needs to be a balance between the subsidies and the priority assigned to public works demanded by the same population that rejects fiscal reform or tax increases.

“I am of the theory of preferring not to continue to increase the burden on the people and that the government should make the effort and sacrifice at this time,” said the President.

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20 July 2022