CORPOELEC: Once the solution, now the problem

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Corpoelec_sede_2New Electricity Minister Jesse Chacón has tried to differentiate himself from his predecessors during his first days at the job. He even pledged to quit if his new plan to fix the ongoing electricity crisis doesn’t work.

But he also wants a radical change inside the national electric corporation (CORPOELEC), so days after its invervention for six months, he proposed to split it into two companies.

At the outset of the crisis, the government used the argument that the old system of multiple electrical companies across the country was to blame, so the comandante presidente ordered in July of 2007 that all of them merger into one single entity.

Even if then Minister Alí Rodríguez Araque insisted that CORPOELEC was doing fine in 2011, his replacement Hector Navarro admitted in December of 2012 that the corporation “…was organized to be ungovernable” and proposed a major internal restructuring process. Navarro didn’t have the chance of oversee it himself as he was let go of the post a week after the recent presidential election. 

Chacón’s proposal calls for two companies: one dedicated exclusively to services and alongside an industrial firm in charge of manufacturing  the supplies required by the national grid and even energy-saving light bulbs.

That doesn’t sound so much like a split as a proposal to create of a brand new company while the existing utility remains intact. A real split would have been leaving all matters related to generation in one company and all distribution affairs in other. But the plan could be opposed by electrical workers’ unions which have also challenged the intervention of CORPOELEC.

The biggest dissapointment is that what was sold to the public as part of the solution has become a big problem in itself and in consequence, the electricity crisis could have actually got worse as a result.

1 COMMENT

  1. It’s just to make an illusion something is being done. They have either no intention or no ability (or both) to actually fix the problem.

    • Actually lack of money will probably keep them from doing very much when you consider it’s going to take billions to fix this problem which has been ignored except for bandage solutions for 14 years.

  2. I think Jesse Chacón is scared of his own words when he said he put himself 100 days to do that.
    OT: the guy had to resign when Chávez sent his brother Arné to jail, back in 2009. Arné was liberated on 31 12. What happened to that trial? Why doesn’t the opposition ask about that publicly? It would make life for Jesse much more exciting, I think.
    I am afraid the opposition does not do it because it doesn’t want some of their people to be annoyed any longer or so.

  3. They said madness was doing the exact same thing a second time expecting a different result.

    Chavismo is the second time around. Venezuela is the person doing the exact same thing. The first time around was the Fourth and the 1970s. No relevant differences found.

  4. Where are the Cubans in all of this? Aren’t communist Cuban engineers getting millions of dollars daily to fix Venezuela’s electric problems?

    Jesse Chacón is likely just another puppet of Cuba. Do not expect improvements in power generation or distribution. Do expect the Castros to steal even more from Venezuela.

  5. Jesse is Cutieeyes guy , he is one of few chavista bigwigs with some management capability , He is more pragmatic than most Chavista chiefs . Maduro blames the loss of electoral support on the poor performance of Corpoelec , He is giving top priority to setting Corpoelec on the right track to avoid the continuation of the blackouts that have plagued the country in the last year . They are tightening supplies to Guayana industries to prioritize supplies to the power generation grid .This means that in the eyes of the regime Jesse , whatever his relatives ideological moral is the best prepared to meet Corpoelec problems . He will do his best but he has many obstacles in the way , he will need extraordinary resources and political support to do his job , He is likely to get both from Maduro . Lets not understimate him . He is likely (with the time pressure he has to face) to go for slap dash solutions , good for today not so good in the long term , involving a lot of expenditures .

  6. I was deeply disappointed by this:

    http://noticiaaldia.com/2013/05/corpoelec-sufrira-profundas-transformaciones/

    Mostly about the emphasis on the 50 thousand workers being the problem.

    Jesse: it’s not a bloated payroll that’s causing the problems. I mean, yes, it doesn’t help when the payroll is bloated, but the REAL problem is lack of investment, and the reason there is no investment is because the State owns the damn sector. If you were to get rid of 25 thousand employees, you would STILL have blackouts because it’s not like the money being used on the payroll would suddenly go into investment, it most probably would go to a slush fund that pays for other hare-brained ideas.

    Then again, Chacón quickly clarified that the 50 thousand employees would not be fired!

    Chacón simply has no clue what he’s doing, whcih makes him perfect for this Cabinet.

    • The question is whether Jesse will step down in 12 weeks, 4 days, 18 hours and 33 minutes as promised.
      OT but not so OT: I wonder what happened with the money his brother had.

      • Kepler,
        No stepping down. Chacón will deny responsibility and simply find a scapegoat for the electric system not working as it should. Most likely the blame will be sabotage by the opposition but it could be Sun spots or imperialist trained wild animals. Maduro’s imagination will conjure up something.

        Another way of looking at it- All Chavista offices and businesses will be on diesel within 100 days so grid problems will go away.

  7. Jesse’s first major decision, upon finding that all transformers being installed in Venezuela are imported, largely from Colombia, was to PROHIBIT the importation of transformers into Venezuela…not a very good start to “solving” Venezuela’s electricity problem.

  8. Gustavo,
    there is no reason to split CORPOELEC in several service companies. Here Hydro-Québec is just one state corporation and functions just fine. The problem is structural: the government let the grid get old and stop the new generation sites and left the demand grow without containment of any type. So the problem is to have competent people with a vision on how to fix the current electric mess.

    As for the bulbs, transformers, etc. As I said in an old comment somewhere, 31 years ago as an EE student I spent an internship in electrical installations in a transformers manufacturing company. Everything was made there, from the coils to the magnets and the final touches, like the painting. So this already existed in Venezuela 31 years ago, what happened in 31 years?

    In that respect, it is not a bad idea at all to try to manufacture locally instead of importing goods. What is farfetched is to think that the State could do that alone. IMHO Chacón is having a good idea, but he should involve the private sector that has experience in it (I wonder what happened with the transformer manufacturing plant). Also, he SHOULD involve Academia. In Venezuela there are EXCELLENT electrical engineers, some of them, professors. If I were the minister I would start by sitting in one table 10 people I know could solve the problem.

    • I agree with you. However, I must say that the local electric company (ENELBAR) was doing just fine before the merger. The problem is that the whole merger of CORPOELEC was mostly improvised.

    • Interesting to know that Venezuela used to manufacture electrical transformers. Having heard about the range of businesses that used to exist before Chavez came along, I’m convinced non of Chavez’s initiatives are new or unique. Not a single one.

      VenIran was preceded by local assembly of Ford and other makes with a greater percentage of local made parts. Chavez helped destroy local ice cream makers, and then celebrated the opening of a poor copy of Coppelia ice cream. I bet Cellphones (or at least radios) were built in Venezuela at some point prior to Chavez, someone here already said they had used to work at a place which wholly manufactured telco equipment (Vergetario’s latest phone is a just a kit of a low end ZTE model which is “manufactured” with a surface mount soldering iron, glue and screwdriver).

  9. 15 years ago people involved with the Power Industry knew that it would be necessary starting the new decade to begin methodically building and upgrading Power Plants and Installations if expanding demand was to reamain sattisfied . The Plans for doing that were either in the books or at some stage of development .Come the new Regime all this was ignored because all they cared for was consolidating their hold on power and the political measures needed to make themselves more popular . Long term planning was totally forgotten , deprioritized . The results are the increasingly disfunctional broken down power system we now suffer . When trolls wax exquisite on how the current supply problems are due to the inordinate rise in demand which has resulted from the regimes lavish treatment of the poor , they forget that it is one of the essential goals of good governance to provide and plan for the future needs of people , by not doing so , by only caring about those measures having an inmmediate electoral effect the regime has shown its incapacity to provide anything resembling good governance . Ultimately this foolish belief that professional practical competent handling of public resources doesnt matter , that only political loyalty and capacity for manipulative theatrical gestures matter , they are in effect digging their own grave . They think that by preaching the wonders of socialism nothing more is needed !! how wrong they are !!

    • To finish up my story, as a very young engineer I used to work in the department of planning of the company in charge of Guri, 32 years ago. Every other week I had colleagues in civil and geological engineering that were sent to Guayana to explore new sites for more hydroelectric damns. At the time, our job was to plan ahead 10, 15 or even 20 years in advance to see if the construction plans could meet the demand and under which circumstances. We used sophisticated optimization modelling and forecasting tools that would take into account rain, evaporation, the levels of the damns, the effects of one dams with respect to others and so on. Sometimes we had a “rush” becuse “the minister” (I have no idea who that was at the time) wanted to know if it was possible to get that many MW in, say 7 years or 15 years…we worked hard to find a “yes” or “no” answer with our programs and tools…all running on a PDP11!

      At the time, we even did research projects. For instance, I used real-time day to day data from Guri to correct some nominal functions or to be more sophisticated in our forecasting…we were 30 years in advance with respect to the “big data” buzz there is today.

      We were also trained by the company to be able to discuss with other type of engineers, for instance mechanical engineers knowledgeable on gas turbines, even though we did not have gas turbines in our system.

      I don’t recall ever having being asked about politics, ever. To get the job all I did was send my CV, pass an interview and pass a skill test.

      So that was my reality 32 years ago. It is very hard for me to believe that the system today is what it is.

      • That’s what makes Chavez’s revolution such a farce, one of the hallmarks of Communism was supposed to be central planning. The Soviets at least managed consistent electrical supplies, socialism of the 21st century can’t manage even that.

      • “At the time, our job was to plan ahead 10, 15 or even 20 years in advance…”

        And today, they can’t even plan for next week.

        • Exactly, Roy, that is why I just cannot believe what is happening now. Someone told me that all hydro projects we were planning were stopped once Giordani came to power, as he did not like hydro production. I don’t know if that is true or not, but it might be the origin of the electric disaster.

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