One Offer with the Dear Agents Letter: June 2nd, 2004

Dear agents:

I think we should be prepared with an innovative solution, which increases the total profits to the agents and the consumers, with clear mechanism to recoup them, while reducing the need for government subsidies in the future.

After reading AES position paper, and working on an alternative plan, I just returned to my original offer, which this time I am able to detail. As some of you may recall, in the Miami meetings in January, I offered my professional services to help resolve the problems of the sector. I was told later on, that it was incorrect to use that occasion to make such a proposal. I hope this time, a serious personal proposition, such as this one, is well taken.

In this regard, I have continue to work on my findings, which I started in 1995, and I believe they offer the sector and the customers the possibility of the development of a standard which has a large profit value no only in DR, but also elsewhere. This time, I offer again my professional services as a consultant or better yet as the OC General Manager, to take the opportunity not only to propose them, but also to implement them. The standard that I am proposing bridges much better the economic-financial perspective of the industry with the engineering-operation one.

I believe we should concentrate on our common interest, instead of developing alternative positions. The agents and customers common interest should be how to solve the quality of service problem, in addition to the sustainability crisis, because customer power interruptions in DR, believe it or not, are well above the budget of the whole power sector. As a reference, EPRI has reported that in the US 50 cents out of every dollar goes to interruptions costs; just imagine how much those interruptions cost to the customers and the Dominican economy. I propose a joint effort (in communication with CONEP) for the development of a small and medium size country Alternate Standard Market Design (ASMD), under a customer orientation, to reduce the value destruction that has been going on for too many years.

The ASMD will serve differentiated quality of service to customers, priced nearly related to their disposable income. I have already discovered a low budget business management system, method and apparatus to support the ASMD, which by the way includes a solution to the free riding problem. The best opportunity we have to bring such innovation to market is to implement it in the Dominican Republic.

I am available to discuss the conditions to offer my independent services under a performance contract.

José Antonio Vanderhorst Silverio is a graduate of Cornell University, with BS ´68, MS ´71 and PhD ´72. Work in CDE from 1972 to 1985 and from 1987 to 1989, when he left as Planning Director. From 1990 to date he has been with Metaldom. He was a member of the Board of Directors of OC, representing the IPP´s.