After President Luis Abinader announced the day before yesterday the suspension of the next quarterly increases in the electricity ratewhich had been applied since last November within the framework of the Electric Pactit is now up to the Electric Cabinet to discuss the details of its application.
This was specified yesterday by the spokesman for the Presidency, Homero Figueroa, who said that “the Electrical Cabinet will discuss the details and the decisions will be communicated in a timely manner.”
The direction of that cabinet was assigned by Decree 530-20 to Lisando Macarrulla, as Minister of the Presidency, who took a leave of absence from his post. That responsibility now falls to Joel Santos, in his capacity as interim minister.
When asked yesterday by Free JournalSantos said that “in the next few hours” all pertinent information will be shared, without giving further details.
It remains to be known until when and under what conditions the application of the increases to the electricity rate agreed in the Electric Pactsigned in February 2021, as well as what it will mean financially for the State to stop the dismantling of the subsidy to that sector.
When making the announcement, the president indicated that “the government has determined to stop the next increases in the electricity rate until the economic circumstances of the Dominican Republic change.”
In the National Pact for the Reform of the Electricity Sector in the Dominican Republic –or Electric Pact–It was agreed to “establish a rationalization scheme for the subsidy policy until it reaches moderate levels”.
The settings
Since November 2021, the Superintendency of Electricity has defined by resolution the quarterly rate adjustment by type of customer of the electricity distribution companies, in order to dismantle the electricity subsidy with a view to 2026. In the current quarter the Government allocates a subsidy monthly of 2,426.73 million pesos.
The adjustment that has been in force since July 1 is 9% for residential customers who consume up to 300 kWh and 7.6% for small businesses, which together represent around 80% of the users regulated by electricity distribution companies.
The Ministry of Finance recently reported that it allocated 34,863.3 million pesos in subsidies during the first half of 2022, to prevent the population from suffering the effects of rising prices of raw materials in international markets.
The institution detailed that the Government transferred 4,798.6 million pesos to the electricity sector, a figure that represented 13.7% of the global amount spent on subsidies in the aforementioned period.
President Abinader assured that he prefers that the State be the one to bear the sacrifices of the international crisis and not pass the effects on to the population. Therefore, he decided to stop the scheduled hikes (adjustments) of the electricity rate and asked the Economic and Social Council (CES) to convene all sectors to adapt the pact to the new circumstances.
What does the opposition say?
One of the reasons argued by the opposition parties of the Dominican Liberation (PLD) and Dominican Revolutionary (PRD), and the former Minister of Energy and Mines, Antonio Isa Conde, to support the measure is that the Government failed to comply with the agreements of the electrical pact by not reducing the losses of the electricity distribution companies or current spending as agreed in the Electric Pact.
Because of this, they understand that the electricity rate it should not have been increased under the pretext that it was a mandate of that agreement.
In the Electric Pact it was agreed as a goal to achieve a level of losses of 15%. In addition, once this is achieved or the six-year term of the Loss Reduction Plan is completed, the Superintendence of Electricity will establish a new goal for this indicator consistent with international standards and the conditions prevailing at that time in the Distribution Companies. of public electricity.
The latest report on the performance of the electricity sector, published by the Ministry of Energy and Mines in April, indicates that the energy losses of the electricity distribution companies stood at 31.3%, for a decrease of 1.3 percentage points compared to December 2021 , when they were at 32.6%.
The losses
In particular, the Eastern Electricity Distribution Company (Edeeste) continued to show more losses: they stood at 48.4% in the last month of 2021, although in April of this year they fell to 45.4%, for a decrease of 2.9 percentage points.
The Southern Electricity Distribution Company (Edesur) had losses of 25.7% as of April 2022. In December 2021 they were around 26.1%.
The Northern Electricity Distribution Company (Edenorte) presented 21.4%, for a decrease of 0.5 percentage points between January and April 2022; in December 2021 losses reached 21.9%. he
