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Venezuela raises electricity rates amid blackouts

Associated Press Modified: June 13, 2011 at 5:00 pm •  Published: June 12, 2011

Individuals who reduce energy consumption by 10 to 20 percent will be rewarded with discounts ranging from 10 to 50 percent, he said.

Businesses including hospitals, water distributors, schools, garbage collectors and oil companies are exempt from the measures, Jaua said. Lights on illuminated billboards and streets signs must use energy-saving bulbs and be shut off at midnight, he added.

Opposition politicians contend the government hasn't invested enough in new electrical projects to keep up with growing demand.

Jaua conceded that "production problems" are partly to blame for recent blackouts, but he also suggested that government adversaries of sabotaging the electricity grid and trying to pin the blame on President Hugo Chavez for the repeated outages.

Officials have not presented evidence of sabotage.

Venezuela had to cope with rolling blackouts for months last year, when Chavez's government said cutbacks were forced by a drought that sharply dropped water levels at Guri dam. The facility produces 70 percent of the country's electricity.

Victor Poleo, a professor of petroleum economics at the Central University of Venezuela, said he doubts sabotage and denied that recent outages have been caused by excessive consumption.

Blackouts are affecting several regions due to insufficient thermoelectric energy production, lack of maintenance and corruption within the state-run utility company, said Poleo, who served as energy minister from 1999 through 2000.

"Today, the crisis is bigger than last year," when the government imposed similar measures aimed at reducing consumption, Poleo said in a telephone interview.