A particular challenge was
developing solutions for
people with scarce cash flow
and payment difficulties.
that linked each dwelling or workshop to a lamp post
and replace it with meters in each of the 300 households. Still another step was to obtain authorization
for use of a pre-paid system from regulating authorities, which after two years was never granted.
Knowledge obtained from the pilot project
enabled it to spread to other poor communities in
Caracas. The plan was simple in design but ambitious
in scale: remove the tangled wire webs in one barrio
after another. Dubbed cero marañas, or zero webs, it
referred to the tangled network of wire webs (
marañas) that took shape when several lines were strung
to the same power source. Caracas barrio webs generally contained 25 to 30 wires bundled, but many featured 100 wires and some were known to reach 150.
The larger the web, the weaker the power and the
greater the number of power interruptions. Slowly, as
the replacement of the dangerous wiring took hold in
the barrios, the number of customers grew by leaps
and bounds. By 2006, there were over 60,000, almost
double the 35,975 in the year before.
What accounted for the popularity of the initiative? Many barrio residents were clearly interested in
obtaining better service and removing unsightly and
hazardous webs. EDC engaged residents and demonstrated leadership in the process of changing these
knots of wiring. The company also hired social workers to provide greater awareness of the community’s
needs. Bringing them into the Barrio Eléctrico initiative was a significant departure from an engineering-minded company.
Installing a meter for the community that
could gauge electricity use from the new collective source often meant working out a group agreement in which each group member was responsible
for another’s bills. Community leaders assisted in
identifying a neighbor who assumed responsibility
for a given meter. In some communities, the company decided to empower neighbors to coordinate
bill collection and disconnect power for those who
failed to pay, acting as de facto “account executives.”
In barrios riddled with high crime, the company
helped form local cooperatives called
Coopeléctri-cas. These local community groups read the meters
and worked with the customers in areas such as
service claims. The logic behind the program was
that people from the community would be easily
trusted and could better avoid the perils of crime
and gang activity.
After more than two years, the company continued to rethink its business model. A particular
challenge was developing solutions for people with
a scarce cash flow and payment difficulties due to
distance and lack of time. The answer was a system
of cash cards, similar to ATM cards. The company
then paid for training programs to educate consumers about the benefits of cash cards, which could be
used not just to pay for electrical service but also to
establish credit-worthiness. For new customers to
accept both paying for electricity and the novelty of
cash cards, technicians had to understand the community’s long-range needs, beyond electricity. The
company as a whole had to realize that the poor must
perceive real and immediate gains from formal connections. Otherwise, even if they agreed to become
customers, they would shortly revert to illegally tapping the nearby post.
But even as the company was building on its success with several new projects in the planning stage,
EDC was nationalized in 2007—thus raising doubts if
the current service system will remain. It is not clear
yet whether the government perceives any value in
the EDC market initiatives with low-income groups,
since it did little to facilitate the process in the previous years. In contrast, the community was starting
to acknowledge the benefits of the program and their
willingness to pay had increased when the electricity
sector nationalization was announced.