The privatization of electricity continues to be the talk of the town. After the privatization commission and the general manager of the CDE spent months saying electricity bills would not suffer increases as a result of privatization, the true story is quite different. The newly created Superintendency of Electricity published advertisements reclassifying rates and setting new charges. The new rate system includes a fixed fee that will be levied on residential and commercial bills based on installed capacity, regardless of whether there is consumption or not. The Superintendency says that the electricity rates will be indexed every month. Earlier the Superintendency had admitted that it authorized last October 1998 that bills be indexed based primarily on government import taxes, the price of petroleum, the consumer price index and the US$-RD$ rate. As a result of the indexing, a 5.5% increase was authorized. Nevertheless, residential consumers and industrial consumers say that the increase represents a 20-40% increase in electricity costs. The Superintendency says that it can do little to penalize the private companies if they increase rates beyond what was authorized. The penalties are contained in the Electricity Bill which has not yet been passed by Congress. The Superintendency also says that consumers will have to pay for the private companies to check counters when a complaint about high billings is presented. This service was offered free by the CDE in the past. If the error is on behalf of the private company, a credit may be given to the client. The president of the Association of Industries of Herrera, Ignacio Herrera says that industries will have to pass the increase on to consumers. He criticized that the increase of 20-40%, not the authorized 5.5%, in the already very high cost of electricity paid by Dominican industrial consumers affects competitiveness of Dominican production. He said that in order to get around this, industries located in Herrera are participating in a plan to make themselves self-sufficient in generation and distribution of power. Press coverage has been especially unfavorable for the Spanish company, Unión Fenosa which won the greater contracts of the two, with responsibility for west of Santo Domingo and north and south central provinces. The contracts for 50% ownership and the management of the state electricity corporation’s distribution and collection areas were won by two companies that were already insiders into the Dominican electrical industry – AES (which already owned and operated the Los Minas power plants) and Unión Fenosa (which during the Balaguer administration had been awarded a contract for administrative organization at the CDE, getting bad reviews for their performance from the Dominican press). Unión Fenosa has been criticized by employees who say their working conditions are now worse. Reportedly, the Spanish company rehired 2,400 of the CDE’s 3,000 employees, but salaries of many were reduced, and employees are complaining that their medical insurance plan was eliminated. The 600 rehired employees of 1,150 CDE employees now under Empresa AES Distribuidora del Este fared much better. Reportedly, they were given a better medical insurance plan and their salaries were improved. Political analysts say that the electricity cost affair may have a negative effect on the ruling party’s aspirations to remain in power. The PLD candidate, Danilo Medina is basing much of his campaign on the good image of the present government. Meanwhile, opinions vary. Some say there was a public relations mishandling, and that Dominicans just have to have patience in this transition period. Others jest that what has happened is that the cost of power outages has simply gone up.
