22 June 2011
In the last three months Venezuela has had three blackouts, and by the looks of it, more is to come. To nobody’s surprise, Chavez has blamed the energy crisis on everybody but himself, ranging from greedy foreign companies to acts of Mother Nature such as El Nino (It was later proved that El Nino was not solely responsible for the blackouts of 2010). On June 10th -11th, electricity outages hit Maracaibo, the country’s second-largest city. During the same weekend, other energy transformers exploded, causing outages and citizen unrest in Zulia, Trujillo, Tachira, Barinas and Merida. The Venezuelan government responded promptly, declaring that the Venezuelan consumer is at fault.
“Demand is excessive,” said Electricity Minister Ali Rodriguez. “All Venezuelans need to make an effort to use electricity in an efficient manner.” In the current era of green technologies, sustainability, energy conservation and high outputs contingent on low inputs, Minister Rodriguez may be speaking the language of the green revolution. In the case of Venezuela, the problem lies behind Chavez’s controls.
Chavez compounded the current energy problem in 2007. By fulfilling his pledge in implementing the ‘Bolivarian Revolution’, Chavez removed energy executives from Corpoelec, the state-run utility company. Men of much experience and know how were gradually replaced by loyal military personnel. Consequently, investment and maintenance in the energy sector were postponed and neglected, and gradually corruption surfaced within Corpoelec. Quickly the energy issue escalated, and due to the lack of investment in new infrastructure, Venezuela was not able to cope with the growing demand, hence, the reoccurring blackouts.
The situation has become so dire, that Colombia (one-time Chavez enemy) is supplying energy to the regions hugging the Venezuelan-Colombian border. This eases Chavez’s pressure of having to ration power throughout the region. To further remedy the energy crisis, the Chavez administration has announced that the price of electricity will increase—an effort to alleviate demand. Already having to cope with a fragile domestic economy, both household consumers and businesses will bear the burden of proposed price hikes.
The biggest energy consumers, such as large businesses, industrial firms and shopping malls must reduce their energy consumption by 10 percent in the next months. If reduction of energy consumption is not met, a surcharge of 10 percent will have to be paid. The surcharge will increase by 5 percent per month until the consumption drops to the newly required levels. If household consumers fail to decrease their energy consumption by 10 percent, compared to 2009 levels, a fee of 75 percent of their monthly bill will be added on. If energy consumption increases compared to the previous month, additional surcharges could total up to 100 percent of the monthly bill.
Venezuelans are already battling with food inflation, a currency that has multiple exchange rates, and now constant energy outages and utility price hikes. Interestingly, the 2012 presidential election is looming, and if Chavez doesn’t get his house in order, there might be a chance, albeit extremely small, that the people might vote Chavez out of power.