2017News

Electricity tariffs could be increased

Photo: Diario Libre

Two of the major changes that the proposed Electricity Pact 2017-2030 could involve the setting of a fixed date for changes in the electricity rates and the authorization of the distribution companies (EDE) to subcontract the collection of the payments. These companies at present are all government-owned and operated.

The final draft document was signed on 21 December 2017, and states that the current fee structure will remain until 30 June 2018, but from then up to 31 December 2022 there will be new rates on regulated consumers would be based on the average price of purchasing the energy, the exchange rate, the reduction in the losses of the EDEs and improvement in their efficiency. Rates will be reviewed every three months.

The pact draft establishes that on 1 January 2023, there will be another set of tariffs that will be calculated on the cost of the provision of electricity and the cost of investment and operation of the sector. The tariffs will fluctuate as of July 2018 so as that the electricity subsidy not be more than 12% of the tariff.

As far as the subcontracting of services is concerned, the document states that there is a period of 12 months following the signature of the pact during which time the conditions for public tenders should be established, allowing other companies to take over the billing process, so that the distributors can concentrate on their main function of the providing electricity to customers.

While the pact should have been signed on 21 December, the signing was postponed coinciding with a press conference by the Association of Industries of Herrera president, Antonio Taveras Guzmán who disclosed several major inefficiencies that the pact would not correct.

As reported in Diario Libre, participants in the talks said the final document was not circulated in a timely manner among the key national energy stakeholders. Guzman told Diario Libre reporters that only President Danilo Medina and the board of the Economic and Social Council knew the contents of the final draft that would be presented for signing.

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Diario Libre
28 December 2017