The Dominican government reports spending RD$83.9 billion on subsidies to the different entities of the national electricity system in 2024, Diario Libre reports. This is over 10% more than the previous year and the government says it is due to poor transmission lines, theft of electricity, and a lack of investment in basic infrastructure.
In the Dominican Republic, a majority of people don’t pay for the power service, or are on special single rate plans. The new electricity authorities want to change this situation to reduce the heavy burden of the electricity costs.
The subsidies also reflect the bulging payroll and perks of those who work in the government-owned utilities and power headquarters.
Spokespersons from all of the major economic sectors have pointed out the need to modernize the national grid and provide cheaper electricity. Official sources admit to losses of up to 40% of the electricity produced.
The sheer size of these subsidies can be better understood when one realizes that they represent four-times the amount spent by the government to ease the effects of inflation on the population, and at least twice what the government spent on social programs.
According to a report from the Ministry of Economy, Planning, and Development, in November 2024 alone, the government allocated over RD$7 billion to electricity subsidies, and this is a 51% increase over the same month in 2023.
In the National Budget for 2024, the administration had planned for the subsidies to the electricity distributors (the EDEs) of RD$89 billion, however, fluctuations in the price of oil on the international market required a 4.8% more in these funds.
The International Monetary Fund (IMF) has been asking the Dominican government to remove or to sizably reduce these subsidies, but every government for the last 25 years has refused to do this.
Looking at the overall picture, Celso Marranzini, the president of the Unified Council of Electricity Distributors (CUED), told reporters that a major issue is the fact that there were 800,000 consumers of electricity who do not pay. This number is equal to 24% of the registered customers of the different EDEs. Recent efforts by authorities have seen a reduction in this situation of electricity theft, as well as some improved sub-stations, transformers, and electricity meters.
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Diario Libre
7 January 2025