Electricity theft law speculations

[NewsWhore]

Franco Uccelli of Bear Stearns speculates on whether or not the government will decide to implement new rulings contained in the bill that criminalizes electricity theft that President Leonel Fernandez is expected to sign into law any day now. Uccelli, in a recent brief on the country, expresses his concern "about the government's ability and/or willingness to enforce this new law given the proximity of next May's presidential election. The new law penalizes power distribution companies for irregularities in billing, and imposes financial penalties and prison terms for stealing electricity and electricity infrastructure. On the positive side, Uccelli comments that the approval of the law is the latest sign that the government is making a concerted effort to motivate improved collections and restore financial viability to the troubled electricity sector. He reports that two weeks ago, the government announced that it was making progress toward finalizing the renegotiation of certain generator contracts and anticipates that subsidies would be reduced by up to US$150 million a year. He reports that Palamara La Vega agreed to reduce its price per KWh by roughly 20% and Itabo, AES Dominciana and EGE-Haina are under pressure to follow suit.

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