Electricity sector in the Dominican Republic
The power sector in the Dominican Republic has traditionally been, and still is, a bottleneck to the country’s economic growth. A prolonged electricity crisis and ineffective remedial measures have led to a vicious cycle of regular blackouts, high operating costs of the distribution companies, large losses including electricity theft through illegal connections, high retail tariffs to cover these inefficiencies, low bill collection rates, a significant fiscal burden for the government through direct and indirect subsidies, and very high costs for consumers as many of them have to rely on expensive alternative self-generated electricity.
As a response to the electricity supply crisis, many consumers turned to alternative self-generation units such as small diesel generators, inverters, kerosene lamps or large power generators (for large industrial consumers). The costs associated with this self-generation capacity are very high as they include equipment purchase, maintenance and fuel supply. This affects the residential, commercial and industrial sectors. For the latter, about 60% of its electricity consumption is self-generated.
As an added assurance to the dilemma of power outages is to use gas stoves. Stoves powered by electricity won’t work during power outages, so if you can, buy a gas tank, and a gas stove. It is a cheaper and more reliable power source. A 100 pound tank, for example, can cost around RD$4,000, and lasts for about three months if used continuously.
Renewable energy resources
Most electricity generation in the Dominican Republic comes from thermal sources. Only 14% of the installed capacity is hydroelectric, with this percentage falling to below 9% when all the thermal self-generation is accounted for. The exploitation of other renewable resources (i.e. solar, wind) is still limited, but it the situation is changing gradually, following the enactment of in May 2007 of the Law of Incentives to Renewable Energy and Special Regimes (Law No. 57-07). Among other incentives, this law establishes financing at favorable interest rates for 75% of the cost of equipment for households that install renewable technologies for self-generation and for communities that develop small-scale projects (below 500 kW).
Generally the electricity operates at 110 Volts/60 Hertz (like in North America) but voltage irregularities can be quite common in the Dominican Republic – sometimes providing less, sometimes providing surges of far more. For this reason, expensive appliances and computers should have surge protection if they are going to be used here. Appliances from countries that use more voltage, for example, 220 volts, will require converters or adapters.
Power service in the DR is provided by two private companies, Distribuidora del Este (AES), responsible for the east side of Santo Domingo and eastern provinces, and Distribuidora del Sur (EDESUR) and Distribuidora del Norte (EDENORTE), responsible for the south and southwestern parts of the city and northern and central provinces. There are also independent electricity providers like Distribuidora Del Este (EDEESTE), Itabo, CEPM, and CEB.
Electricity tariffs in the Dominican Republic are among the highest in the Latin American and Caribbean region. This is due to several factors: reliance on imported oil, weak institutional environment, difficulties to pursue large non-payers, high prices originally negotiated in power purchase agreements with the generators, high commercial risks faced by generators such as non-payment or delayed payment by the distribution companies and/or the government, low cash recovery index (CRI), and high operating costs in the distribution companies.
The country’s policy of cross-subsidizing residential tariffs by disproportionate increases in commercial and industrial tariffs translates into higher rates for industrial and commercial consumers compared to residential consumers.
The extension in the customers’ billing period can add several thousands pesos or more to the bill, as if the quantity of invoiced kilowatts passes 700kWh, through the current scheme, the invoiced kilowatts all get charged at the highest level, which can effectively double the bill!
In a world where bulkbuying producing economies of scale and enables greater discounts, the Dominican Republic Electricity companies have chosen to structure things exactly the opposite. Electricity users are penalized for using electricity. The more they use – the rates they pay go up.
Electricity tariffs start around 4.44 pesos per kWh, but increase to more than 10 pesos per kWh when consumption goes above 700 kWh. Not only do rates go up, but users are forced to pay the higher rate retroactively on every single unit they consumed, which can mean for the unfortunate customer, that using just one more kWh in that billing period could double their entire bill. And in case if the Electricity company for whatever reason lengthen the billing period by just a couple of days, this can provide big dividends for electricity companies.
So when you get a bill make sure that the billing period only covers between 26 and 31 days, and keep your own record of kWh on your meter.
View the current tariff scheme: Edenorte tariffs
Monthly cost (average):
If you are renting an apartment your electricity bill will be anywhere between (RD600 and RD2000 depending on location and residential complex rules). If you are renting a house with a private pool the cost can start at RD2500 per month and up.
Category: DR Living |