Rafael,
You bring up an interesting subject and if I may I would like to help explain the situation to you. A lot of the posters are correct in what they say but it goes much deeper than that.
I keep hearing that the problem within the electricity sector is that people are not paying their
bills. Though this may in fact be a part of the problem it is not the only
problem.
It should be pointed out that the DR has 49 power generating plants.
Here is a slightly dated report that should help you in understanding the electrical generating system here.
A big problem, as I see it, is the Madrid Agreement (AdeM) which I have determined was signed by LF in 1999 and was due to end in 2004. This seems to have been a contract between the government and the IPP’s, who were owned by the Spanish company Union Fenosa, for the production of electricity. The Dominican government has been unable to pay the entire bill to date. In 2002 the Mejía administration extended the (AdeM) to a period from 5 to 15 years and I think there were additional monies paid for this new contract plus the additional interest that Union Fenosa would draw from this extension. In 2003 the Dominican government took control of the electric distributors, Edenorte and Edesur by purchasing them from Union Fenosa and the deal was worth US$362.5 million. They also bought Distribucion del Este, which is half-owned by the government and managed by U.S. firm AES. The first payment of US$15 million was paid at the end of September 2003 and the balance was to be paid over 12 years. The purchase was not sanctioned by the IMF, with which the Dominican Republic secured a standby loan of US$600 million, and the IMF deal was put on hold. At the time of this deal there was a large outcry from many sectors of the DR as to where the money for this purchase would come from. I might add that Mejía was known to be the ‘hooo’ of the company Union Fenosa as he had allowed them to do a number of things that were against the electrical laws and some broad deals on new power plants to be built which were questioned as to their legality.
As stated in a report produced by the US Department of State in 2005, “The GODR has not entirely resolved arrears owed to several independent power producers (IPPs) in connection with the partial privatization of the energy sector and faces additional difficulty meeting payment obligations in the short term. This has contributed to cash flow and credit problems for the IPPs and widespread sporadic blackouts. While the GODR has made some partial payments, significant arrears remain outstanding and are a cause of ongoing concern. The 2002 "Madrid Agreement" between the government and most IPPS stipulated that participating IPPs would lower electricity tariffs, if the government made a large one-time payment. The government has not been able to secure financing to put this change into effect. The "Madrid Agreement", which was to be funded with US$ 150 million in World Bank funds, was put on hold once the IMF suspended its stand-by agreement with the Dominican Government in early 2004. The Dominican Government has developed with the assistance of the World Bank, the Inter-American Development Bank and USAID a comprehensive plan to stabilize the energy sector by the end of 2005, envisaging some electricity rationing, improving collections, better targeting of subsidies, improving regulation of the sector, achieving greater efficiencies, and rolling over arrears.”
Of the 49 power generation plants that are located in the DR over 50 % of them are always out of operation on any given
day. The usual excuse give is that they are unable to purchase fuel or they are down for maintenance or just ‘broken’. If memory serves me correctly I seem to remember there are two power plants that were built a few years ago, (Union Fenosa?), that were supposedly completed and to date have never generated any electricity but get paid monthly for a portion of the electricity that they are supposed to supply, (AdeM).
Put this all together and maybe you can better understand the situation here as it pertains to electricity.
Rick