Electric power fight

PANAMA. President Ricardo Martinelli has declared war on electric companies saying they lied about reducing their tariffs on users and even increasing prices in the last month.

Martinelli called an extraordinary cabinet meeting to analyze what measures will be applied to sustain the promise he made during his political campaign – to reduce the electricity costs.

Presidency Minister , Jimmy Papadimitriu sides with the President saying the energy companies have made the President's promise a joke.

“ Its is unacceptable for the people receive a higher electric bill than last month's” said Martinelli.

Economy annalist Enrique Ho said the increase of energy costs is unjustified , but he does recognizes that the formula used to calculate energy consumption is transparent.

“I think the rules are clear. I don't think the increases are beingmade deliberately.

“ The formula hasn't changed since the energy company were privatized, but the process must be clearer ” he said.

Roberto Alfaro, former president of the Executive's Association of Panama (APEDE), says the increase in energy costs relies on charging for hydro energy as if it was thermic energy.

This reflects negatively directly on the consumer.

He suggests a revision of this but also recommends the government to me more careful regarding energy regulations.

“ All parts must come to the table, generators, distributors and transmitters of electricity.

“ The government must find a formula that benefits the user.

“They must care for judicial security for the companies.

“I think is not an easy job but is necessary” said Alfaro.

According to Rafael Medina of the Social Security Retirees Association, the government should be stronger with electrical companies.

The unexpected increase has made consumer patience to go over the edge.

On August 5, the President met with the energy generating companies.

They suggested purchase contracts should have period longer than 10 years to lower investment risks.

The National Authority of public services (ASEP) does regular surprise inspections on electrical companies and various irregularities have been detected.

In Panama, the charge for power is one of the highest in the world. Ten times higher than the cost in Europe.