miércoles, junio 29, 2005

Energy crisis really hurts small businesses

Jose Antonio Vanderhorst Silverio, PhD
Interdependent Consultant on Electricity
Boca Raton, Florida.

DR1 reports that electricity costs are the sum of the electricity bill plus the shortage costs. Notice how shortage costs are very high for small and medium size businesses, something that has been explained time and time again on this BW. This is a great example of how they are hurting. The liberalization of the retail market and its integration with the wholesale market of electricity is the way to stop in a few years the excessive energy waste in the Hispaniola and elsewhere.

While this might go totally unnoticed, the current energy crisis is making a big dent in the fragile finances of small businesses. Small and medium-sized traders and people who offer services are particularly vulnerable, due to a lack of a reliable and reasonably priced energy supply. The worsening of the power situation over the past few weeks has required that businesses to run their costly alternative power sources for long hours. Furthermore, the darkness of the night is promoting more criminal activity, according to a report in El Caribe newspaper. In addition, many products lose their appeal or simply disappear from the market. Sixto Roman, spokesperson for the Pharmacy Union, told El Caribe reporters that the blackouts are "punishing" his people because serums, suppositories and certain pharmaceutical products need to be kept at cooler temperatures. He said that in just one ! month, four small pharmacies closed in San Pedro de Macoris because they were not able to afford the added cost of a constant power supply.
Corner storeowners were quick to join in the complaints. Ruben Mateo, a member of the Association of Staple Retailers, said that most of his members no longer stock fresh meats and many are losing their stocks of sausages. Mateo said that even with credit, it was very difficult for a small corner store to purchase a 4 or 5-kilowatt generator in order to keep their freezers going. Besides, he said, "these generators consume as much as RD$400 pesos of fuel per day - even more if beer makes up a large part of their sales."