2005News

Business leaders want to “float” electricity

Some of the leading business sectors of the Dominican Republic, including the Federation of Industrial Associations (FIA), the Dominican Chamber of Merchant Businesses and the National Young Business Association (ANJE), consider that the IMF’s idea that the price of electricity should be allowed to “float” on the local market is a good one, as long as the costs of generation and distribution are clear and transparent. The different representatives agreed that as long as the current contracts are re-negotiated and the costs are transparent, they felt that the IMF demands were “reasonable.” Most believed that if this were to come about, the costs of electricity would drop from the current 23c a KWh to about 10c or 11c the KWh (kilowatt-hour). The key point is that the contracts have to be renegotiated, since with the current contracts in place the price of electricity would reach 40c a KWh under current conditions. According to the superintendent of electricity, Francisco Mendez, the World Bank is requiring the DR to “float” the price of electricity as part of the prerequisites for the disbursement of the US$150 million loan to shore up the energy sector. The low reliability and the high cost of electricity in the Dominican Republic is a major factor working against the competitiveness of most business that rely on the public electricity grid.