Venezuela's Hugo Chavez declares energy crisis

Christopher Toothaker

President Hugo Chavez signed a decree declaring an energy emergency in Venezuela to facilitate his government's efforts to ease severe power shortages.

“We've been working on this because it's a necessity. The truth is, it's an emergency,” Mr. Chavez said Monday.

Under the decree, Venezuelans who use more than 500 kilowatt-hours of electricity per month — an estimated 24 per cent of all residential consumers — must reduce their consumption by 10 per cent or be required to pay a 75 per cent price increase.

Those who increase consumption by 10 per cent will be slapped with a 100 per cent price increase. If they boost usage by 20 per cent, the price hike rises to 200 per cent.

Venezuela imposed electricity and water rationing in December to prevent a collapse of the electricity grid as water levels behind the Guri Dam fell to critical lows. The dam supplies most of Venezuela's electricity.

Rolling blackouts lasting up to four hours are being imposed throughout the country — except the capital of Caracas — as the country struggles with a severe drought.

Venezuelans who collaborate with the government to save energy will be rewarded, Mr. Chavez said.

Consumers who reduce their electricity usage by 10 to 20 per Mr. cent will receive a 25 per Mr. cent discount on monthly bills. And those who decrease consumption by more than 20 per Mr. cent, will get a 50 pe Mr. rcent discount.

Mr. Chavez said he would set an example, vowing that energy consumption at the presidential palace would drop significantly.

The energy conservation plan also requires big businesses and industrial complexes to reduce consumption by 20 per cent or face sanctions, including 24-hour to 48-hour shutdowns.

Total power consumption has risen about 25 per cent since 2004 — a period during which Venezuela enjoyed an oil boom while electricity rates remained frozen, leaving little incentive to save energy. And millions of poor Venezuelans help themselves to electricity for free by splicing wires onto power lines, further straining the country's power grid.

Venezuela is suffering from a drought as Pacific Ocean currents have changed weather patterns as part of the El Nino phenomenon, and Mr. Chavez has warned Venezuelans that the South American country's power woes could worsen if rains don't come as expected when the rainy season begins in May or June.

“This is the worst summer I've seen in my life,” Mr. Chavez said. “Everything is dry.”

Critics counter that Mr. Chavez failed to invest enough in electrical projects to meet growing demand.

Energy Minister Ali Rodriguez announced last week that Mr. Chavez's administration plans to spend $15-billion (U.S.) over the next five years to increase electricity production.

Mr. Rodriguez rejected allegations the government is mostly to blame for the energy shortages.

“It's not due to lack of investment, even if it's true that we've had problems (and) delays with some projects,” Mr. Rodriguez said.

Venezuela has sought advice from its Latin American allies, including Brazil, Argentina and communist-led Cuba, on how to more effectively resolve its energy crisis.