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8448: Durban on Electricity in Haiti (fwd)

From: Lance Durban <lpdurban@yahoo.com>

In the recent discussion on electricity, Marx-Vilaire

> Make no mistake, the poor very often resort to the proverbial
> "priz", but their "theft" -- in terms of forgone revenue to
> EdH -- is dwarfed by the big assembly plants in the Industrial
> Park and the huge houses sitting on top of the hills
> overlooking the slums.
I have no official statistics, but I would be very surprised if
this is accurate.  Let me relate the scuttlebutt I've heard and
then cite some numbers.

Several months ago, I heard (indirectly through a well-placed
friend) that an Ed'H official had acknowledged to him that less
than 50% of the residential electricity is paid for and that
even commercial collections had dropped to around 80%.  This
official had gone on to complain that poor collections were
really a political problem (pa faute moin!) since Ed'H  trucks
were increasingly afraid to disconnect unauthorized connections
in poorer neighborhoods for fear of being stoned (or worse). 
What was required, he maintained, was police escort for the Ed'H
trucks doing the disconnecting.

The above does not deny that the wealthy of Haiti use a
disproportionate share of electricity generated.  Nor do I have
any idea of the collection rates in wealthier parts of the
capital compared with the those in poorer neighborhoods. 
However, I doubt that disconnections in wealthier areas are
hampered by threats of personal security to the Ed'H crews.  
Now, this does NOT mean that wealthy folks might not be bribing
Ed'H crews to disconnect their counters or even to provide them
illegal connections...and granted, rich people would have more
wherewithal to pay these kinds of bribes.  So Marx-Vilaire's
contention above cannot be totally ruled out by those of us who
do not have access to the data.  HOWEVER, that does not include
Ed'H which must have a fairly good idea of how much electricity
is going into a neighborhood and what the revenues from that
neighborhood are.

What leads me to suspect that Ed'H makes out worst in the poorer
neighborhoods?  The fact that small users pay the smallest
rates, so even if everyone in a poor neighborhood did pay, the
revenues generated might only be equal to half the revenues from
the same amount of electricity sold into a richer neighborhood
where everyone paid.  And servicing many more small accounts is
additional administrative cost so providing electricity to
poorer neighborhood probably is more expensive from a cost
standpoint than providing it to richer neighborhoods.

So who gets the best supply of electricity?  Other than perhaps
the National Palace, the industrial area out near the airport is
doing pretty well.   Is that so Haitian industrialists will be
better able to compete with international rivals?  Hah!  Not
likely!  Ed'H knows that not only are the large industrial users
more likely to pay their bills, but the price of electricity
sold to big daytime industrial users is the highest priced
electricity in the land....maybe in the Caribbean.   

To put numbers to the above discussion, a big house in the hills
above Petionville connected to Ed'H but with an inverter system
and generator for back-up pays about US$.12 to .13 per KWH these
days.  A moderate-usage factory near the industrial park next to
the airport is pays E'dH around US$ .21 to .22 per KWH.  Now,
assume the factory runs a 250 KW generator (costing US$23,000 in
Miami) with an assumed 6 year lifespan, the cost of spare parts
and regular maintenance, and the current price of diesel. 
Voila, this factory can generate ALL of its own power for around
US$.15-.18/KWH.  And, I have heard of several plants who have
already opted out of expensive Ed'H power in favor of generating
their own!  Gradual loss of its prime base of paying customers
ought to be a concern of Ed'H, yet I wonder if they have even

What course of action would I recommend for Ed'H?  That's easy. 
Collect from your customers, and penalize those who do not pay
with summary disconnections.  As for the illegal hook-ups, don't
just disconnect them, disconnect them and shoot a 220 volt
charge down the line to permanently disable the illegally
connected fridge, TV, clock, or whatever!  Yes, this would need
support from the highest levels in the land, but word would get
out pretty darn quick and I can bet that there would be
relatively few burned out refrigerators, TV's, radios, etc. as
people hastened to either:
   1.  disconnect on their illegal hook-up on their own
   2.  sign up for a legal counter
   3.  cut a deal with a 'legal' neighbor to tap into
          Ed'H power running through his counter.  

Lance Durban

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