Julio Cross, the Superintendent of Power, was the guest at the Corripio Communications Group luncheon yesterday. He denied that the Dominican government would take over the production and distribution of electricity and categorically rejected the possibility of a crisis of sustainability in the electric sector. He said the previous crisis in the sector was due to the childish antics of the distributors. In an interesting aside, Cross told the journalists from Hoy that the General Law on Electricity establishes in Article 93 the obligation of the distributors to compensate users for power interruptions. He estimates that if Resolution 56 – that obliges the distributors to compensate users for blackouts ? had been applied as of August 2002, it would equate to RD$276 million in revenues for the state.
Cross said that his hands shook when he authorized the 12-percent increase for February?s electricity bills, but that he was obliged to do so due to the fact that 70 percent of the costs of electricity are connected to the cost of petroleum. Cross explained that the increase offsets the removal of the toll being unjustly charged to companies that sought to reduce their costs by connecting to the national power grid and purchasing power directly from the generators.
Cross was again critical of the management of Union Fenosa and its power distributors Edenorte and Edesur. Cross told Hoy newspaper: ?Every decision that is taken in Edenorte and Edeesur is a conflict of interests. They have accumulated a RD$14 billion debt on books when we delivered those companies with zero debt. Of that debt more than 55 percent is owed to companies that are affiliates of Union Fenosa. It is a vulgar conflict of interests. Still it is not clear how much they have paid, thus this is the business deal of the century when you lose half a peso while your profits are one peso.?
He pointed out the specific case of where Edenorte and Edesur books show they paid US$20 million for management programs that AES Edeeste paid only US$1.5 million. ?And who sold the program to Edenorte and Edesur? Soluciones, a Union Fenosa company.?
He said the difference is that US legislation penalizes this kind of corruption when doing business abroad. He explained that that makes it very difficult for a US company to create satellite business to take profits out of a country. ?In the United States that practice is penalized with prison,? he said.
