Identifier | Created | Classification | Origin |
---|---|---|---|
09SANTODOMINGO892 | 2009-08-13 16:38:00 | CONFIDENTIAL | Embassy Santo Domingo |
VZCZCXYZ0023 PP RUEHWEB DE RUEHDG #0892 2251638 ZNY CCCCC ZZH P 131638Z AUG 09 FM AMEMBASSY SANTO DOMINGO TO RUEHC/SECSTATE WASHDC PRIORITY 3187 INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 1735 RUEHCV/AMEMBASSY CARACAS PRIORITY 1018 RUEHPU/AMEMBASSY PORT AU PRINCE PRIORITY 5031 RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE |
C O N F I D E N T I A L SANTO DOMINGO 000892 |
1. (U) President Fernandez announced on August 4, 2009 that the GoDR, with the assistance of Inter-American Development Bank (IDB), World Bank (WB), and the Organization of Petroleum Exporting Countries (OPEC) will undertake a two-year plan to address the country's electricity crisis. The initial outline of the plan, however, indicates that it will not address the chief problem affecting the energy sector: large scale rate avoidance by major manufacturing and retail businesses. The plan comes at a time when sustained black-outs have led to increased public discontent over the Dominican Republic's ineffective electricity system. End Summary. -------------------------- -------------------------- Details Emerge on Two-year Plan to Solve Electricity Crisis -------------------------- -------------------------- 2. (U) The August 4, 2009 meeting between GoDR President Fernandez and representatives of the IDB and WB came as a surprise to Embassy's electricity sector contacts. Dominican electricity sector problems are voluminously documented and after decades of GoDR inaction there is widespread skepticism that the two-year plan will resolve the country's electricity problems, which include a technically inefficient distribution system, a high rate of electricity theft, and a $500 million debt to electricity generators. The full plan will not be released until early October 2009, but IDBrepresentatives publically disclosed some details. 3. (SBU) The commitments reportedly include $10 million to improve the electricity distributionsystem, with the goal of making technical systemlosses on-par with the regional average of 12 pecent. Of the $150 million, the GoDR will contriute $38 million. The remainder will be provided b the WB ($42M), the IDB ($40M), and the OPEC ($30M). Current total system losses due to inefficiecy and theft are reported to be 33 percent. Howver, Roberto Herrera (protect throughout), CEO o the San Pedro de Macoris Electricity Company tod EconOff that losses may be as high as 40 percent nationally. Moreover, Herrera says it is likely that 75 to 90 percent of the system inefficiency is due to theft, rather than technical problems. 4. (C) The two-year plan puts particular emphasis on proper metering and payment for energy use. According to Herrera, there are 2.3 million energy users in the DR, yet only 1 million meters. He mentioned three principal types of energy theft. The first type of theft involves illegal connections from low-voltage power lines to homes and small businesses. The second type of theft involves tapping into a neighbor,s meter and slowly increasing the amount energy used to avoid detection. The final, and most sophisticated theft, requires complicit behavior on the part of the distribution companies. In this scenario, a distribution company deletes the energy use record resulting in substantially lower costs to the user. Herrera went on to opine that the plan was "nothing more than a publicity stunt". -------------------------- Comment -------------------------- 5. (C) The outline of the two-year plan indicates that it will not address the large-scale avoidance of electricity payments by major manufacturing and retail companies. If, as Herrera suggests, this avoidance is achieved through the complicity of the distribution companies themselves, then increased investment in metering is unlikely to result in a solution. Final judgment should be withheld, however, until the fall plan is presented in October. End comment. BULLEN |