The detailed share for the different sources is as follows:[3] The large coal-fired Punta Catalina power plant has been accused of causing considerable soil, water and pollution, reportedly affecting the health and livelihoods of local residents.

However, between 2004 and 2006, there has been an average annual decrease of about 10% in total electricity generated.,[3][5] Currently, there are plans for the construction of two 600MW coal-fired plants, Montecristi and Azúa, by the private sector.

Frequent and prolonged blackouts result mainly from financial causes (i.e. high system losses and low bill collection) that are further aggravated by technical factors (i.e. unadequate investments in transmission and distribution).

[1] The transmission system in the Dominican Republic is weak and overloaded, failing to provide reliable power and causing system-wide blackouts.

[8] Sustained poor service quality and relatively high prices have induced theft through illegal connections and non-payment of electricity bills.

It consists of: EdeNorte and EdeSur are entirely government-owned, the remaining 50% shares being held by the government's Enterprise Trust Fund, Fondo Patrimonial de las Empresas (FONPER).

It also maintains a 50% ownership of the third one, EdeEste, (the additional 50% is owned by the Trust Company of the West (TCW) which is operated by AES Corporation, its original buyer.

Among other incentives, this law establishes financing at favorable interest rates for 75% of the cost of equipment for households that install renewable technologies for self-generation and for communities that develop small-scale projects (below 500 kW).

According to CDEEE, the first of the new series of dams and hydropower plants - Pinalito - is a "model of environmental management", with only 12 families resettled and extensive reforestation.

[14] A 2001 study estimated that the Dominican Republic had a wind generation potential of 68,300GWh per year, equivalent to more than six times its current power production.

With an investment of approximately US$100 million, the park, located in the Yaguate municipality, San Cristóbal province, increased the national photovoltaic capacity by 50%.

In addition, the Girasol Solar Park will annually avoid the emission into the atmosphere of 150,000 tons of carbon dioxide (CO2) and the import of 400,000 barrels of oil, contributing to mitigating the effects of climate change and representing savings in foreign currency, respectively.

[20] Prior to the 1990s reform, the Dominican power sector was in the hands of the state-owned, vertically-integrated Corporación Dominicana de Electricidad (CDE).

Generation capacity was not enough to meet peak demand, which translated into continuous supply constrains and widespread blackouts lasting up to 20 hours.

[2] In 1998-1999, under the first government of Leonel Fernández, the sector was unbundled and the vertically state-owned monopoly, Corporación Dominicana de Electricidad (CDE), was broken into a number of generation companies.

Under this law, the government's operational presence in the sector was to be through three entities: A new holding company, Corporación Dominicana de Empresas Eléctricas (CDEE) was established to own ETED and EGEHID and to eventually substitute the CDE.

This led to temporary reduction in blackouts and distribution losses and increasing operating efficiency, the combination of which translated in improvements in the quality of service.

However, rising oil prices, the introduction of generalized subsidies and political interference negatively affected the sector's financial health.

In 2003, these unfavorable conditions and strong political pressure led the government to repurchase Union Fenosa's shares in the privatized distribution companies EdeNorte and EdeSur.

These companies have experienced a deteriorating operating efficiency since their renationalization.,[1][2] The electricity sector has been in a sustained crisis since 2002, characterized by very high losses (both technical and commercial) and frequent blackouts of long duration.

However, the country's macroeconomic crisis, the perverse incentives built into the PRA, and the deficiently targeted subsidy scheme have jeopardized the medium-term sustainability of the program.

The absence of demand management, the lack of metering systems, sustained losses, a culture of non-payment and the absence of incentives for the distribution companies to fix the technical problems make it urgent to design a new subsidy and rationing system that is part of a more comprehensive approach to solve the problems of the power sector.

In 2006, by request of President Leonel Fernández, the CDEEE, the CNE and the SIE designed a Comprehensive Plan for the Electricity Sector for the period 2006-2012.

The main objectives of the plan are: achieve financial sustainability of the sector, reduce electricity prices for final consumers and promote an efficient use of energy.

For the medium term, it recommends the renegotiation of contracts with generators, the construction of coal plants, the development of transmission plans, the addition of new hydroelectric capacity, the promotion of renewable energy sources, a review of cross-subsidies and the strengthening of the Electricity Superintendence (SIE).

Residential consumers outside the PRA areas and thus likely not to be among the poorest, are charged below-cost electricity prices for consumption below 700 kWh/month, a very high threshold by international standards.

The financial burden in this case is transferred to the distribution companies, which have found themselves unable to cover their costs in a scenario of rising oil prices, low efficiency and a limited customer base that could be charged to finance the cross-subsidy.

The government has started to reduce cross-subsidies gradually, with the final objective of limiting them to households with monthly consumption below 200 kWh, which is closer to thresholds for subsidized residential electricity encountered in other countries.

[1] As previously described, the precarious situation of the electricity sector in the Dominican Republic is not caused primarily by limited generation capacity.

Currently (December 2007), there is just one registered CDM project in the electricity sector in the Dominican Republic, the El Guanillo wind farm, with estimated emission reductions of 123,916 tCO2e per year.