ADIE feels government distorts energy sector

SD. The president of the ADIE suggested that there is a need for a great national pact to deal with the problems of the electricity system. He said that the political forces, the civilian forces, the state authorities, the churches and other sectors should take part.

Otto Gonzalez said that the sector has to make long range plans so that there will not be a need to go changing the rules of the game as happens at the present time and so that there is coherence in the plans.

For this he suggested open and clear talks in which they try to create a long term plan for the electric sector. "Our worry is that there be some coherence, so the plans for the electric sector are fundamental, but a plan that is long term."

He said that if they do not plan correctly they might make the capacity too big and what they do then is that other projects that have entered previously, which have still not paid themselves off, can see their returns interrupted.

He stressed the fact that the generators have long term investments and that once they decide to invest US$400 million, they have to have a guarantee of a return on this capital, without changing the rules of the game that are now in play.

A call is issued to comply with what the Electricity Law says

Otto Gonzalez said that the participation of the state in the generation of electricity creates distortions and is contrary to the General Law of Electricity 125-01 which established the promotion of competition for that there is more efficient generation.

Taking part in the Dialogo Libre of the Omnimedia Group, the parent company of the Diario Libre, Gonzalez was accompanied by the executive vice-president of the entity, Milton Morrison, and he sai that as an organization they respect the government's decision because it makes use of their sovereignty, but that they are not necessarily in agreement with their participation in the sector as a generator because private capital cannot compete with the state.

"The capital which the state invests does not have the same demands as private capital, which is to say: What are the returns of capital invested by the state? Zero? It could be a social earnings which is calculated according to the project, nevertheless private capital has international demands, it has an expected return rate and this is the principle demand, which is to say, compete....and there is no such competition," he pointed out.

He stressed that when the legislators passed the General Electricity Law under the current scheme the state was the promoter, but when it converted itself into a competitor it distorts the nature of the legislation.

He said that he felt that they will have to see what is the results of this decision are going to be and its impact on the transparency of the generation costs because they talk of prices, but the proper thing is that there be crystal clear transparency and more if they are dealing with state companies in which they should be clear with what the generation costs are going to be, the financing and the guarantee of the state.

"Our worry is principally whether at the end there is a consensus because the ADIE was created by a worry of the generators. Well, obviously to try to protect their common interests like any association, as any union, but also with the aim of trying to see that there really can be a competitive and stable electricity service."

He assured the several editors that as a sector their greatest worry is that there should be an electricity service that is long term stable, the guarantees the investments because when you make an investment of US$200 or US$300 million that will be recovered in 15 or 20 years, if at five years they change the rules of the game, they change the vision, it is very difficult to compete.

Regarding this particular aspect, the executive vice-president of the ADIE, Milton Morrison, said that the worry should also be that of all Dominican society because if they do not take the precautions of all of the costs involved in this type of transaction, they could return to those that used to be in the electric sector, the generation pool, before the capitalization.

"We all recall what the generation pool was like, and this was very tied to the fact that the selfsame operation programs, the maintenance programs and the demand did not have the resources needed. What we need to foresee is that we do not return to this situation," he said.

Eliminating blackouts is a power of the Distributors

The president of the Dominican Association of the Electricity Industry (ADIE) made it clear that the decision to supply energy to a population without interruptions as occurs during some days of the Christmas period, is a responsibility of the distributors.

"We are not the ones that provide electricity; we are asked for or not, electricity, which is to say that it is the distributors that decide whether or not they provide or not electricity and the generators respond to this," he said.

He said that the impact of the blackouts on the economy and on the lives of the people is large, in spite of the fact that many are now accustomed to them, because there are always blackouts in one place or another.

He recalled that they install large emergency generators in business, in the industries that consume diesel that is sold by the Refinery, which implies an economic cost to the country.

He reported that they have tried to quantify the cost of the blackouts, but what they do know is that it has a serious impact on the life of the Dominicans, an additional cost that they have to bear.

During the last few years, the authorities have guaranteed permanent electric energy for the 24th of December and the 31st of December.