Re: "Venezuela asks heads of Public Energy companies to resign"
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CARACAS (Dow Jones)--Venezuela's government is calling for the directors of the regional, state-run power companies to resign, as part of a reorganization while the country battles energy shortages.
The request was made in a private letter dated March 19 and signed by Electricity Minister Ali Rodriguez. It was addressed to the heads of the country's seven main regional power companies, including Electricidad de Caracas CA (ELDAY, EDC.CA), which provides power to the capital city.
A copy of the letter was obtained Wednesday by Dow Jones Newswires.
"We're undertaking an integrated evaluation...of the companies in the electricity sector, which brings us to review the functions, responsibilities and performance of the leadership personnel," Rodriguez said.
As such, he said it is necessary that the higher officials offer up their jobs so those individuals "can either be re-confirmed in their positions, or be placed in different positions."
The seven regional companies fall under the nation's umbrella electric company, Corpoelec, which is directly controlled by the Electricity Ministry.
Officials at Electricidad de Caracas weren't immediately available for comment.
"Our country needs urgent solutions regarding electricity, and that will allow us to reclaim our fatherland," Rodriguez' letter concluded.
Venezuela declared an "electricity emergency" earlier this year as a long-running drought began drying up the reservoirs at hydropower dams that supply 73% of the country's electricity.
President Hugo Chavez' government has ordered businesses and residents to cut their power usage by 20% in an effort to prevent a collapse of the system. Rolling, scheduled blackouts have become common in most cities throughout the country, though Caracas has been spared.
The rainy season is a little more than a month away, and officials have expressed confidence the electricity grid will normalize after that, although critics have their doubts.
The letter suggested that not only should the heads of the regional companies resign, but so should those one or two levels below. This has created some confusion among the regional companies as to whose jobs are at stake.
Venezuela nationalized the electricity sector in 2007 and since then has been talking about reducing the heavy bureaucratic weight of the various regional electric companies.
Some of the blame for the current energy crisis has been placed on a lack of integration among the regional firms. The letter from Rodriguez suggests the government may be hoping to use the crisis as a stepping board to finally integrate the sector.
The Chavez government has promised to boost installed electricity capacity by 25% this year to prevent shortages in the future. That would push Venezuela's electricity-generating capacity on the main grid to nearly 30 gigawatts, from about 24 gigawatts at the start of 2010.
Much of the new capacity would come in the form of thermoelectricity. The government wants to reduce its reliance on hydropower and instead take advantage of its oil and gas resources by bringing in more thermopower plants.
-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738; dan.molinski@dowjones.com
(Jeanne Liendo contributed to this report.)