Venezuela resorts to rationing amid new blackouts

Nothing exemplifies the mismanagement of Venezuela more than the electricity crisis. Through a series of missteps and the lack of investment, Venezuela continues to be mired in an electrical crisis over a year and a half after it began. We have gone from blaming El Niño, to saying the problem had been solved, to now saying it is the increase in use of electricity that created the problem.

A while back I wrote this post to show the timeline of contradictions by the government, and I have actually been updating it given all that is being said. So, if you are interested in the problem, that post is dynamic, as I add news links to it. Check it out.

What is interesting is that, despite the vice president’s claim that “the growth in demand” is one of the main culprits of the electrical problem, data shows otherwise, as at least peak demand was higher in 2009 and 2010, due mostly to lower temperatures this year.

The problem seems to be due more to not only the lack of investment, but the lack of planning and capable people making the decisions. Miguel Lara, former Head of OPSIS, said that the solutions implemented "were inconvenient and what they did was to purchase new problems and not worry about maintainance,” while a former vice minister of energy says that the electric system has become a patchwork.

But Jose Manuel Aller, a professor of engineering at the Universidad Simon Bolivar, makes more serious accusations. He says that because there was an emergency, purchases without bids were allowed, but that many of those acquired are inadequate, of dubious origin, and very expensive.

This is the case, says Professor Aller, of the distributed power plants that came from Cuba. They should have cost half of the between $1.6 and 1.8 billion.

The same is true of the barges that were purchased from General Electric, which cost $250 million each. The market price for those is $160 million. Reportedly, the overcharge is so that they could be delivered in 2011.

While the government spent all of 2010 blaming the rains, now the Guri dam is 10 meters above the operational level as it has never really stopped raining all year, but between problems with generation and problems with transmission, there is insufficient capacity.

Meanwhile, the government installed thermoelectric power plants that run on natural gas, but the country’s production continues to go down and fuel oil has been used in some of them.

--- Miguel Octavio, a Venezuelan, is not a fan of Venezuelan President Hugo Chávez. You can read his blog here.