NewsWhore
01-08-2008, 04:00 PM
Civil engineer and consultant on energy matters Bernardo Castellanos has written to Hoy explaining why electricity in the DR is so expensive. He says that included in the power rates is a US$0.09 intermediation (VAD) cost per kWh. This has increased from US$0.03 in 2004 and US$0.08 in 2005, even before the increase in fuel prices, he points out. He writes to explain that an efficient electricity distribution cost would only need a value-added distribution cost of US$0.03. But as a result of the inefficient operation of the two distribution monopolies (EdeNorte and EdeSur operated by the government) and EdeEste (AES), Dominicans have to pay them a subsidy of US$250 million a year. This is in addition to the US$600 million subsidy that comes from the government, and in addition to the cost of operating the CDEEE, the contracts of the Smith & Enron and Cogentrix generators (US$100 million), and the transmission tolls (US$400 million). He points out that the subsidy from the central government has increased from US$250 million in 2004.
Castellanos writes that it is not correct to say that the state is subsidizing the electricity rates. He explains that even with the high cost of petroleum, the power rate should be US$0.14 kWh and not the US$0.20 kWh that is currently being charged. He explains that the distribution companies are purchasing power from the generators at the same prices as the non-regulated users (UNR) that buy energy at US $0.11kWh-US$0.12kWh. He opposes any further increase in the rate of power, as this will only serve to stimulate the power distribution companies' inefficiency. He says that to increase the power rate would be unfair and abusive, because this would mean increasing the VAD to more than US$0.10. He says that the government has already budgeted US$800 million in subsidies for 2008, according to statements from the Minister of Economy and Planning.
More... (http://www.dr1.com/index.html#4)
Castellanos writes that it is not correct to say that the state is subsidizing the electricity rates. He explains that even with the high cost of petroleum, the power rate should be US$0.14 kWh and not the US$0.20 kWh that is currently being charged. He explains that the distribution companies are purchasing power from the generators at the same prices as the non-regulated users (UNR) that buy energy at US $0.11kWh-US$0.12kWh. He opposes any further increase in the rate of power, as this will only serve to stimulate the power distribution companies' inefficiency. He says that to increase the power rate would be unfair and abusive, because this would mean increasing the VAD to more than US$0.10. He says that the government has already budgeted US$800 million in subsidies for 2008, according to statements from the Minister of Economy and Planning.
More... (http://www.dr1.com/index.html#4)