Lights Out in Venezuela

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In the 1990s, Venezuela embarked on a program of selling state power companies to private investors in a bid to attract the needed investments. Chávez ended that program when he was inaugurated in February, 1999. Last year, Chávez nationalized the country's two remaining private power companies, which were owned by U.S. outfits CMS Energy (CMS) and AES (AES), and created a new state power company to oversee the development of the industry. Concrete results have been slow to appear.

Power Wasted, Lost, or Stolen

Chávez froze power rates in 2003, a move that has stymied conservation efforts. In addition, about a third of all generated power is never billed, lost through transmission line faults, houses with no meters, or simply stolen from power lines by enterprising Venezuelans who hook up their own cables to siphon off electricity.

In May, Chávez said his government would invest $10.3 billion in 42 projects through 2013 to boost power generation by 8,635 megawatts, or about 33%. Chávez said the investment would correct two decades of paralysis for the hydroelectric industry. "This investment will allow us to meet demand for the next 15 years," the President said, calling the project part of the socialist revolution he is leading. "Venezuela is continuing on the road to being a world energy power."

Yet skeptics abound, especially as outages occur almost daily in some eastern cities. And in some rural areas, farmers and residents buy portable diesel-fuel generators to overcome the constant outages. The government has repeatedly announced billions of dollars of investments with no noticeable improvement. "Power isn't a priority for this government," says Matas, the analyst in Caracas. "The government reacts to problems but doesn't anticipate them. They only move when something happens."

For Marquez, improvements can't come soon enough. "I mean, it's bad enough for me when the lights go out," she says. "But I only sell paint. Imagine if I had a grocery store. I couldn't survive."

Wilson is a special correspondent based in Caracas.