The eternal electricity deficit of the EDES: 69% of what they collect
SD. During all of 2013 the Electricity Distribution Enterprises (EDES) showed a deficit of US$1.033 billion. Nevertheless, their income results almost completely from the sale of energy ( and of commercial collections and financial income)reached the amount of US$1.499 billion. This means that these companies registered in their balance sheets a red result equal to 69% of their own income.
As in former years, the government transferred resources to the EDES which in 2013 amounted to US$1.109 billion with the idea of covering their “operational deficit.”But the investments in capital goods, the only option that could take these enterprises to the safe port of financial sustainability, were only US$152 million.
This has been the policy imposed by the last few administrations on the EDES: a plentiful subsidy to cover the inefficiencies of the EDES in collect for electricity served and an insufficient capital investment which allows them to continue at the bottom of efficiency.
In his speech before the National Assembly on 27 February, President Danilo Medina announced “three fundamental axis” to leave behind “this situation of high prices and deficient services” in the electric sector.
In his announcement, he seemed to give priority to the area of generation and until now, that has been the case. The only advances have been the start of the work needed to build in Punta Catalina, Bani, two new, coal-fired generation units of 280 megawatts each, with an investment of around US$2.0 billion However, financing has yet to be obtained.
Together with this project, in which the state returns to take on a direct and central role in electricity generation, there is also the signing of the contract between Ruben Bichara, the executive vice-president of the Dominican Corporation of State-owned Electricity Enterprises (CDEEE) and AES Dominicana. This agreement establishes a six year extension of the contract to purchase electricity, in exchange for the conversion to natural gas in the Los Mina V and VI plants, which will have a capacity to generate 270 megawatts from the 210 at present.
The business community feels that the convocation by the government for an electricity pact is imminent. One of the issues is the debt the EDES have with the generators, and this carries over to the effects of freezing the electricity rates.
They are dealing with a subsidy that the government is finding it hard to pay. On 29 June 2014, the debt was US$701 million.
US$2.375 billion to cover deficit
Between 2010 and 2013, the contributions of the government to the EDES for them to cover their operational deficit adds up to US$2.375 billion, while the investment in capital goods that these companies have carried out during this period only comes to US$467 million. During the period between January and April 2014, these contributions amounted to US$161.8 million. In the area of distribution, the country should invest US$45 million a year for four years, according to what was announced by President Medina.
Category: DR News |