The country is already running an electricity deficit of 300MW a day: earlier in the week the country was producing about 1,200MW but demand was running at around 1,500MW.
The problem is that the generating companies are not prepared to buy gas to provide electricity for which they are not getting paid. The generating companies say that the distribution companies have racked up large debts (of around US$150m) with them. The distribution companies claim that they are not being paid by their customers, most notably the government (which owes them US$20m).
The result of all this is that great tracts of the country are now being blacked out: some places, especially poorer areas, are not getting any electricity for nine hours at a stretch. These blackouts have already led to demonstrations and confrontations with the police.
The electricity companies say that the devaluation has squeezed them hard: they have to pay dollars for fuel but are earning pesos. They are pushing for the government to sanction an increase in electricity prices (which have been pegged since February) of at least 40% to put them back on an even keel. The electricity companies say that they had budgeted on an exchange rate of RD$24.7 for the year: already the rate is down to RD$35.
What is worrying is that the financial problem could mean that the new US$400m, 300MW gas-powered AES Andrés plant, which is due to start in September, may be delayed. The plant is now in its final phase of testing, but the operator, AES, is unlikely to commission it if it will run at a loss.
As to the underlying financial crisis besetting the government, it is far from clear when the IMF will come to the rescue (WR-03-24).
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