NewsWhore
12-07-2010, 03:50 PM
Despite the increase in the price of the fuels used in generating electricity on the international markets, the fundamental reason for the increase in the electricity rates by 11% is due to the financial deterioration in the electricity sector. The increase penalizes the users who do pay for a poor and expensive electricity service. However, according to Diario Libre, a former Superintendent of Electricity, George Reinoso, says that the official entity did not provide an accurate explanation for the indicators used to increase the rates, since the numbers they used are not correct due to the fact that the fuel used for electricity generation has gone up some 36.9%.
According to adviser Bernardo Castellanos, the government found itself in a situation where it needed to cover up the inefficiencies, poor management and the excess personnel, and therefore the running expenses of the distributors and the State Electricity Companies (CDEEE) with a rate increase that he considered abusive. He argued that an indexed rate could not be used to justify an increase in the electricity rates since the current rate is designed for the distributors to recover their financial losses. He said that the greater the financial loss is for the distributors, the greater will be the indexation that they have to put on the rates in order to recover those losses.
"The problem is not one of an insufficient rate as they are trying to sell us. The rate covers, but what it can't cover is the inefficiencies of the excessive current expenses of the distributors and the terrible commercial management that allows more than a million homes and commercial units to consume energy without getting billed. If they are not billed they can't be collected, since in order to collect payment, you first have to bill", he stated.
The 11% increase in the electricity rates, applied by the Superintendent of Electricity (SIE) was based on the increase of 36.9% in the price of Fuel Oil #6, the main fuel used for generation. The price increase took place between July 2009 and December 2010, according to George Reinoso. Other variables taken into account were the prices of natural gas, which went up 8% and coal, which went up 3.6%, while the exchange rate went up 3.6%. The calculation is done starting in July 2009, because that was the last time that the rate was adjusted. Since then - according to official data - the United States consumer price index, another indicator that impacts the price of electricity, also went up 2.2%.
More... (http://www.dr1.com/index.html#6)
According to adviser Bernardo Castellanos, the government found itself in a situation where it needed to cover up the inefficiencies, poor management and the excess personnel, and therefore the running expenses of the distributors and the State Electricity Companies (CDEEE) with a rate increase that he considered abusive. He argued that an indexed rate could not be used to justify an increase in the electricity rates since the current rate is designed for the distributors to recover their financial losses. He said that the greater the financial loss is for the distributors, the greater will be the indexation that they have to put on the rates in order to recover those losses.
"The problem is not one of an insufficient rate as they are trying to sell us. The rate covers, but what it can't cover is the inefficiencies of the excessive current expenses of the distributors and the terrible commercial management that allows more than a million homes and commercial units to consume energy without getting billed. If they are not billed they can't be collected, since in order to collect payment, you first have to bill", he stated.
The 11% increase in the electricity rates, applied by the Superintendent of Electricity (SIE) was based on the increase of 36.9% in the price of Fuel Oil #6, the main fuel used for generation. The price increase took place between July 2009 and December 2010, according to George Reinoso. Other variables taken into account were the prices of natural gas, which went up 8% and coal, which went up 3.6%, while the exchange rate went up 3.6%. The calculation is done starting in July 2009, because that was the last time that the rate was adjusted. Since then - according to official data - the United States consumer price index, another indicator that impacts the price of electricity, also went up 2.2%.
More... (http://www.dr1.com/index.html#6)