BTN News: The escalating demand for electricity in the Dominican Republic, driven by extreme temperatures, has placed an immense strain on the country’s aging electrical infrastructure. Celso Marranzini, the President of the Unified Council of Electric Distribution Companies (CUED), recently highlighted the significant challenges faced by the national grid, which is struggling to meet the soaring energy needs of its population. According to Marranzini, the current system is simply not equipped to handle the unprecedented demand, particularly during peak evening hours when the situation becomes “intolerable.”
For many Dominicans, power outages have become a distressing norm, especially between 8:00 PM and 1:00 AM. Marranzini’s statement underscores the gravity of the situation, as residents find themselves coping with extended periods of darkness due to the overloading of substation circuits. The crux of the issue lies in the fact that many of these substations were built in the 1970s, rendering them obsolete in the face of today’s demands.
The country’s electrical generation capacity, which now approaches 4,000 megawatts during nighttime, is a record high for the Dominican Republic. This unprecedented level of demand underscores the urgent need for patience and systemic upgrades. Marranzini explained that routine maintenance, substation rotation, and the integration of new facilities frequently lead to service interruptions, further exacerbating the public’s frustration.
Industry Concerns: ADIE and ANJE Call for Action
The broader concerns about the Dominican Republic’s electrical system extend beyond just the distribution challenges. Manuel Cabral, Executive Vice President of the Dominican Association of the Electrical Industry (ADIE), expressed deep concern over the distribution issues plaguing the country. From a generation standpoint, Cabral insists there is no justification for the frequent power interruptions, pointing to inefficiencies and losses in the distribution network as the core issues.
These losses are not just operational but also financial, with Cabral estimating that the electrical subsidy for the current year could reach a staggering $1.5 billion. This figure highlights the financial strain on the system and the urgent need for a sustainable solution. Cabral’s concerns are echoed by José Nelton González, President of the National Association of Young Entrepreneurs (ANJE), who called for the private sector to unite in finding lasting solutions. González emphasized the critical importance of improving efficiency within the electricity distribution companies and continuing investments in infrastructure enhancements.
Both Marranzini and the executives of ADIE and ANJE shared their perspectives during the American Chamber of Commerce of the Dominican Republic (Amchamdr) monthly luncheon, where Marranzini was the guest of honor and keynote speaker. Their discussions painted a sobering picture of the challenges facing the Dominican Republic’s electrical system and the need for comprehensive reforms.
Breaking the Vicious Cycle: Addressing the Core Issues
Marranzini pointed to a vicious cycle plaguing the electrical sector: losses, tariffs, financial deficits, lack of investment, deteriorating infrastructure, and both technical and non-technical losses. One of the most pressing issues is theft, which Marranzini emphasized is not confined to impoverished neighborhoods but is a widespread problem across all sectors of Dominican society.
The challenges facing the Electric Distribution Companies (EDE) are not new, but their persistence has made them a formidable barrier to progress. Marranzini acknowledged that the EDEs have been trapped in a cycle of inefficiency and fraud for years, turning these issues into urgent problems that must be addressed head-on. To combat these challenges, Marranzini has launched an aggressive campaign against energy theft and called for the Public Ministry to restore the role of the General Prosecutor’s Office for the Electrical System (Pegase). He stressed the need for stricter penalties for fraudulent energy consumption to ensure accountability and deter future theft.
A Plan for Modernization and Efficiency
In response to these challenges, Marranzini unveiled a comprehensive plan aimed at modernizing and enhancing the efficiency of the three major electricity distribution companies—Edesur, Edenorte, and Edeeste. The plan focuses on reducing technical and commercial losses, modernizing infrastructure, and implementing transparent management practices. Once these reforms are in place, Marranzini plans to invite the private sector to participate in the operation and maintenance of the system through a bidding process. He made it clear that this initiative is not a sale or partial privatization of assets but rather a strategy to improve operational efficiency while retaining state ownership of the companies.
Marranzini assured that the companies will remain state-owned, and the private firms that win the bids will be required to deliver measurable results to maintain their contracts.
The Economic Impact: A Fiscal Crisis in the Making
Circe Almánzar, a prominent business leader, weighed in on the crisis during the “Economic 2024: Transforming Data into Opportunities for Our People” forum, organized by the Ministry of Industry, Commerce, and Mipymes. Almánzar argued that the crisis in the electrical sector is fundamentally a fiscal issue that requires an urgent review of the roadmap established in the Electric Pact. She emphasized that although a detailed plan was created to address the sector’s core problems, many of its actions have not been executed due to shifting economic and political variables, making it imperative to revisit and implement concrete measures.
Almánzar also highlighted that the electrical crisis goes beyond just power outages. It is a significant fiscal burden on the country, with all Dominicans bearing the cost through taxes. She stressed the need for a holistic approach to solving the crisis, one that not only addresses the symptoms but also tackles the underlying financial and operational inefficiencies that have plagued the sector for decades.
In conclusion, the Dominican Republic’s electrical system is at a critical juncture, with the current challenges presenting both risks and opportunities. The path forward requires a comprehensive approach that includes infrastructure modernization, improved efficiency, and robust enforcement against theft and fraud. Only through coordinated efforts and decisive action can the country hope to build a sustainable and reliable electrical system that meets the needs of its growing population.
