According to the economic editor of the newspaper Hoy, the rising price of petroleum could have a negative effect on the Dominican economic recovery. According to the businesspeople and economists surveyed, the higher oil prices would affect the balance of payments and reduce the capacity of the country to increase its international reserves of hard currency. This, in turn, will affect the ability of the country to recover from the recession due to higher energy costs, owing to the fact that the price of electricity is indexed to the cost of oil. Yesterday oil closed at US$40.06 a barrel for the first time since 1990. Not even a Saudi announcement of increased production could lower the price, and this, combined with a second interruption of Iraqi oil, spurred fears regarding oil shipments from the region. Mario Mendez commented that the current cost structure in the electric sector and the impact that oil prices will have, combined with the devaluation of the peso, could make the financial situation of the electricity market nearly unsustainable.
And amid this new reality, the Listin Diario reports that the Superintendent of Power (SIE) has announced that his office will fine any of the generation facilities that suspend their operations to pressure the government for payments. These sanctions are authorized under the General Law of Electricity 125-01. Yesterday, the SIE fined two generators RD$40.6 million because they took their plants offline without authorization or any justified technical reason. According to Ramon Cruz, one of the directors of the SIE, the Dominican Power Partners and Puerto Plata Electric Company have until 20 May to pay their fines or appeal their case. The fines are based on the application of 10,000 times the minimum salary for public sector workers at the time of the decision from the SIE. A violation of Inset ?K? of Article 499 of the General Law of Electricity states that ?serious faults are classified as those that place the stability, security and dependability of the National Interconnected Electric System at risk.?
While these days large areas of the DR have been virtually blackout-free, long power outages can be expected once the election has taken place on 16 May, when the political incentives to maintain service vanish.