Today, I’m continuing on with The View From Your Electric Bill, a series of posts designed to float the ultimate political heresy: maybe, just maybe, idiotically low electricity prices in Venezuela have a little something to do with overconsumption and, thereby, with the electric crisis.
And so finally we come to Caracas. Of course, given Venezuela’s crazy four-exchange-rates-at-the-same-time system, there’s no straightforward answer to the question of how much electricity costs in Dollar terms. Personally, I think it sure seems like the parallel rate is the rate that people use to set prices, so going by the Voldemort rate, Venezuelans pay 1.7 US cents per kilowatt hour!
Even if you take Cadivi’s upper rate – Bs.4.30:$, we’re still talking just 2.9 US cents/kWh…and that’s the ones who pay at all, rather than just illegally hooking into the grid.
Out of my sample, it’s not quite the lowest price: Argentinian subsidies cut their costs to consumers below even that. But still, it’s pretty paltry.
But notice this bit, on the right side, towards the middle:
…which means that, even in the middle of a massive electrical crisis and after 8 years of runaway inflation, Venezuelans are paying the same nominal rates they were paying in early 2002!! So, in real terms, electricity prices have been falling throughout this crisis.
It’s an aggressive subsidy, too. In Venezuela, today, the first 200 kWh each month cost consumers just 22 voldemort cents…that’s less than one tenth of one cent per kilowatt hour! And notice that that’s not a targeted subsidy: it’s a manguangua everybody gets.
It’s true that earlier this year penalties were introduced for residential consumers who pull more than 500 kWh per month and fail to reduce demand. But that applies to Caracas only, and then only to 17% of consuming households. What’s remarkable is that this is something that the state media trumpets as a feature, not a bug!
Most Venezuelans pay either nothing at all for their juice, or so little they have no real incentive to save. It astounds me that this basic insight is simply left out of the debate about the electric crisis, both by a government that wants to talk only about the weather and by an opposition that wants to talk only about underinvestment.
Folks, it’s not a difficult problem. People turn off the lights when they have a reason to turn off the lights!
Send us your electric bill! We’ll black out your personal details. The address is caracaschronicles at fastmail dot fm