Sporadic power outages and rationing are weighing on Chavez’s popularity ahead of important legislative elections in September and he has called in help from allies Cuba, Brazil and Argentina to try to solve the problem.
The government blames the shortages on a long drought and soaring demand during five years of economic growth until 2008 in the OPEC-member nation, which relies on hydro-power for 70 percent of its electricity.
Critics say under-investment has undermined the power-grid and exposed the failings of Chavez’s “21st century socialism” policies during his 11-year rule. Chavez, who earlier declared the electricity crisis an “emergency”, freeing up funds to build new power stations, announced the measures in a speech broadcast on all radio and television channels late on Monday.
“If you reduce consumption between 10 and 20 percent, we’ll put a 25 percent discount on your bill. If the reduction is 20 percent or more the discount will be 50 percent,” he said.
But the socialist, who nationalized electricity companies in 2007, said consumers who failed to cut usage by at least 10 percent will see their bills rise by 75 percent. Increases in usage will face fines of up to 200 percent.
Industry must make cuts of at least 20 percent to avoid fines.
Last month, Chavez was forced to cancel electricity rationing in Caracas, the capital, after a chaotic first day that left people stuck in elevators and dangerous neighborhoods without street lighting.
Rationing is still in place in regional cities and villages across the South American oil exporter, whose 28 million people were used to plentiful and cheap electricity. The shortages are likely to slow Venezuela’s recovery from a deep recession.
The oil industry mostly has its own power stations, but the government says shortages could cause problems in the oil producing region of Lake Maracaibo as well as some petrochemical plants..
This year Venezuela plans to spend $4 billion to install 4,000 megawatts of production, to increase capacity to 28,000 MW. The new plants will be gas- and oil-powered, which will reduce the country’s exports of fuel oil and diesel.
