Few bright lights for 2008

The Dominican energy sector ended 2008 with few bright spots and a lot of shady areas. In the area of electricity generation, the market has not extended its generation capacity and recovery has been very slow, as reported in El Caribe.

The end of the year saw declines in generation because of breakdowns, and over the past two months many generators were obliged to shut down because of financial considerations.

The debt with the generators has increased recently, and despite several meetings and promises of payment made by the government, there are still millions of dollars pending payment.

In the marketplace, no plans have been presented aimed at attracting new investments in the area of generation. In reality, people linked to the sector raised their voices in 2008 so that the government might give greater priority to this market, since 2009 is seen to come with problems in supplying the demand that is currently being fulfilled at about 80% when 100% is the requirement.

During the crisis in the sector, that led to meetings at the highest levels, including President Leonel Fernandez, the debt of more than US$400 million since the end of June has caused numerous blackouts as the generators take their plants off line due to a lack of fuel.

Pressure only led to a few small payments on account.

Beginning in November, the government paid out US$10 million within a framework of a payment program worked out with the generators. But the accumulated debt with the generators is not the lack of payment by the government, because since August of this year, the electricity sector plan of action established a government payment of US$495 million.

However, the disbursements were even greater, some US$573.7 million. As a solution to the debt problem, researcher Jose Luis Moreno San Juan, a UASD faculty member, proposed that the CDEEE make the origin of the debts more transparent, because he considered that “evidently, many of the debts are precisely on the indexation of the contracts for the purchase and sale of electricity.”