Renewable Power Down in Honduras

Despite having increased its installed base of renewable energy generation sources, Honduras is actually getting proportionally less energy from renewable sources than it previously was.

The result of this lower generation has been roving blackouts all across Honduras this year. This comes despite policies of the Lobo Sosa administration.

In 2010 they approved 47 renewable energy projects, with a combined generation capacity of 750 megawatts.  Only four of those projects have actually broken ground to begin construction, and only one, a small hydroelectric project generating 12 megawatts, is actually operating.

In 2010, Honduras generated  6,744.3 gigawatt hours of power, split as follows:

• 3,449.6 gigawatt hours (52%) from oil fired plants
• 3,080.3 gigawatt hours (44.8%) from hydraulic generation
• 142.1 gigawatt hours (2.1%) from biomass 
• 22.1 gigawatt hours (0.3%) from imported power

From 2010 to 2013, Honduras saw a slight increase in installed capacity, from 1610 megwatts to 1734.9 megawatts.  That's a 124.9 megawatt increase, nearly all of it because of a single wind power farm, Cerro Hule (102 megawatts), coming on line.

There was a slight increase in biomass generation by 2013 as well, from an installed capacity of 91.4 megawatts to 105.5 megawatts, primarily from sugar cane processing.

By installed capacity, in 2010 renewable sources represented 38.4% of the generating capacity of Honduras.  In 2013 that had risen to 43.7% of installed capacity, as the director of SERNA reported earlier this year.

But despite representing almost 44% of the generating capacity, renewable installations actually generated only 40% of the power produced in Honduras this year.

Why was this?

There was an overall drop in power generation in Honduras between 2010 and 2013.  In 2010, Honduras generated 6744.3 gigawatt hours of power.  In 2013, it generated 5898.8 gigawatt hours, a decrease of 845.5 gigawatt hours.

The good news is that wind power and biomass generation increased.

The bad news is that everything else decreased.  Oil-fired plants generated 22 gigawatt hours less electricity in 2013 versus 2010.

The biggest drop in generation came from hydroelectric.

In 2010 hydroelectric plants generated 44.8% of the power used in Honduras.  In 2013, only 33.7% of the power generated in Honduras came from hydroelectric, a drop of 11%.  Total hydraulic generation dropped by nearly a third, from 3083.3 gigawatt hours in 2010 to 1999.1 gigawatt hours in 2013.  Part of this is due to mismanagement of the El Cajón dam, built on the Comayagua River in the 1980s.

The amount of water in its reservoir has been lowered to reduce pressure on the dam, which is reportedly leaking more than 2000 liters per second through cracks that threaten to flood the turbine room.  Reduced water pressure means reduced production of electricity.

Another factor contributing to this decrease in hydroelectric generation is drought.  Much of the southern half of the country has been experiencing a multi-year drought.

The renewable energy strategy of ENEE places a higher emphasis on hydroelectric projects than any other form of renewable energy.  The majority of the 47 renewable energy projects approved in 2010 were hydroelectric projects, mostly small.

Honduras is at continuing risk for drought going forward, according to climate change maps.

Other types of renewable power would seem like better options for the future, and would lower the confrontations caused with local people-- often rural farmers, and in many cases indigenous people.

Unfortunately, when Honduras strikes out into renewable energy, it is just as likely to grant contracts to companies with no expertise.

So the hydroelectric projects that can be done with local resources keep on coming. But the power generated does not.

New Taxes, Old Economic Problems

The lame duck Honduran Congress is now piling on taxes to try and make up for the last four years of spending as the Lobo Sosa administration prepares to give way to the presidency of Juan Orlando Hernández.

On Saturday, December 21, the Congress passed a new, extensive series of taxes and rule changes designed to bring up to 4000 million lempiras ($200 million) in new revenue to the government over the next year.  The same measure imposes restrictions on the transfer of income between government branches that is expected to bring about a further 12000 million lempiras ($600 million) in savings.

Everyone will pay a new "special contribution" of 3% on all sales.  This is on top of the already existing sales tax of 12%.

All customs tax exemptions (commonly used by religious institutions, businesses aimed at tourism, newspapers, and power generation companies) are cancelled.  Telephone and cable television service will be subject to the 15% tax, but internet service will continue to be taxed at 12%.

Everyone except those given an exemption under legislation called the Regímenes Especiales de Importación y Turismo will pay a further 5% tax on taxable income greater than 1 million lempiras ($50,000).

Consumption taxes are in general regressive-- they disproportionately affect the poorest members of a population. In addition to the general impact that the Honduran poor will experience from the added special contribution tax, other aspects of the new law will sharply affect their use of energy.

Some consumers receive a subsidy on their electric service.  Until now, that subsidy has been for those who consume less than 150 kw/month.  From today forward, the subsidy will only be for those who consume 75 kw/month or less.

Gasoline will be taxed a further 5.3 lempiras/gallon ($0.25/gallon). The income is supposed to be earmarked for infrastructure and social welfare projects.

But the poor are not targeted by the new sweeping tax increases: property owners will see sharp increases in taxation as well. 

The central government will retain 10% of the gains from the purchase or sale of property, bonds, rights, and titles as a capital gains tax. Dividends will be taxed at 10% as well.

Consumption and property transfer taxes make sense as policy because Honduras has a poor record of tax collection on basic income tax. But that doesn't mean income tax rates were left alone, either.

Foreign companies will pay a tax of 10% on gross income in Honduras. Honduran companies will pay 1.5% on their gross income over 3 million lempiras ($150,000) except if their business is selling cement, services given to the government, pharmaceuticals for human consumption, petroleum products, or supplies for baking, which will pay a tax of 0.75%.

The tax law also contemplates retaining more money for the central government at the expense of entities it owes fixed levels of funding.

The new law freezes the 2014 budget for the central government at 2013 levels. But it also changes how amounts specified in the constitution for other government entities, such as municipal governments and the National Autonomous University, are calculated. Some kinds of income that previously counted in calculating the amounts to transfer will be exempt from being counted now. This means that all dependencies specified as receiving a fixed percent of the government income will receive a budget cut, while the central government will retain more.

On top of all this, there is yet another revision to the security tax.

This revision extends the security tax to cover previously exempt bank accounts with deposits under 120,000 lempiras.  Now, all savings and checking accounts will be taxed. COHEP, one of the principal business organizations in the country, warns that this might lead to capital flight.

So why is Congress doing this now?

Part of the answer is that Honduras simply has to find more revenue or the government cannot continue. And some of the answer is partisan politics, with a hand-off of government from one National Party president to another, something that has never happened since the new Honduran constitution was set in place in the 1980s. Even with the new taxes and savings envisioned under this law, it will not close the fiscal deficit under which the government operates.

Right now the lame duck Congress has enough National Party members to pass anything they want, short of a constitutional amendment. The new Congress might not be so amenable.  The National Party will not have sufficient representation to do what it wants.  It will need to make alliances with other parties in order to enact legislation, making laws like this one difficult to pass.

Most of the Liberal Party members in the present Congress opposed the new taxes, and suggested that the press headline their coverage "National Party passes new taxes". The Liberal membership in the incoming Congress will be joined by LIBRE and PAC contingents that can also be expected to be less inclined to automatically agree with the ruling party's legislative direction

The Lobo Sosa government used 1.4 billion dollars in borrowing to make ends meet this year.  Under the new tax law's projections, the increases will, at best, cover half of that.

It will be up to the next government to figure out how to cover the other half, while improving actual tax collection enough to cover those projections. And that is presumably why, along with changes in the leadership of the police and military, the first choices for government offices made by Juan Orlando Hernández included a new head of the Dirección Ejecutivo de Ingresos (Executive Office of Income), Miriam Guzman, reportedly already at work.

Tigre Bonilla and Rene Osorio Canales Out

Porfirio Lobo Sosa  is letting Juan Orlando Hernández start making changes in the Honduran government before he is sworn in this coming January, underlining the collaboration that exists between these two Partido Nacional administrations, while highlighting their differences in key changes in the police and military leadership.

On December 17, Lobo Sosa gave his Ministers until the end of the day to hand in their resignations so that Hernandez could install his choices once he made them.  The first act was to shuffle the command in the police and military.  The new holders of these positions have already been sworn in by Lobo Sosa today, with Hernández speaking at the ceremony.

Juan Carlos "Tigre" Bonilla is out.  Ramon Antonio Sabillon Pineda is the new police commander.  Sabillon previously was the commander of the special investigations division of the police. 

Bonilla is rumored to have had differences with Arturo Corrales, the Security Minister, who Hernández is considering keeping in that office. 

Felix Villanueva Mejia will be the assistant director of the police.  The preventative police will be headed by Javier Leopoldo Flores Milla, while Hernández will keep the current director of the transit police, Abencio Atilio Flores Morazán, in that position.  The director of the investigative police (Dirección Nacional de Investigación Criminal) will be Jose Leandro Osorio.  The special investigative police will be headed by Ruben Martel Garcia,while Hector Ivan Mejia will serve as director of the police academy.  Abraham Flores Marcelino will be head of the police special unit, and José Leonel Enamorado will be the police commander of the joint military and police task force.

The high command of the Honduran Armed Forces was also changed significantly. 

In the place of the current military commander, Rene Osorio Canales, will be Fredy Santiago Diaz Zelaya.  In December Zelaya received his fifth star, along with Julian Pacheco Tinoco, who will remain as commander of the Military Intelligence service.  Rigoberto Espinosa Posadas, who was promoted in December, will be second in command of the Honduran Joint Chiefs.  Miguel Palacios Romero will be the military Inspector General.  Jorge Alberto Fernández López will command the Air Force, and Héctor Orlando Caballero Espinoza will command the Navy.

Lobo Sosa also let Juan Orlando Hernández name and install his head of the Dirección Ejecutivo de Ingresos (DEI), the Honduran equivalent of the IRS. 

This important government unit, which failed to meet its quotas all through the Lobo Sosa government, will be Miriam Guzman.  She also has taken the reins of her government unit already.

Detecting Voting Fraud in Honduras: El Paraíso, Copan

Since the Honduran election ended, we have busy here: we captured the Tribunal Supremo Electoral's election results, and placed them, along with the Voto Social vote count, in a database.

That means we are in a position to analyze apparent voting pattern across the country. And there are some glaring anomalies in the voting. 

None of these is more apparent than the case of voting in El Paraíso, Copan, where the voter turnout, according to the TSE numbers, was 85%. That would be exceptional participation, compared to previous Honduran elections, and is far above the average levels of participation in this election.

El Paraíso is an interesting place. Its Mayor, Alexander Ardon, is widely considered to be a member of the Sinaloa cartel in Honduras. In a report on organized crime in Guatemala, Honduras, and El Salvador, the Wilson Center reported:

Honduran police intelligence says that El Paraíso, Copan Mayor Alexander Ardon works with the Sinaloa Cartel.  Ardon has built a town hall that resembles the White House, complete with a heliport on the roof, and travels with 40 heavily armed bodyguards.  Cameras monitor the roads leading in and out of town, intelligence services say. And there are reports that the Mayor often closes the city to outsiders for big parties that include norteño music groups flown in from Mexico.

One correction: it's not just norteño music: it's narcocorridos that characterize the bands flown in to El Paraíso.

Voting was definitely distorted in El Paraíso on November 24th. 

One election monitoring group reported that 50 election workers from out of town staying in a hotel were locked in the night before the election, surrounded by over 100 armed men who threatened to shoot them if they tried to leave the hotel and assume their poll duties.  Another such group got out of the hotel, but were stopped along the way by armed men, who slashed their tires and told them if they continued onward, they'd be killed.  The group in the hotel was freed late in the day on Nov. 24 by Officer Erazo Mejia of the police, but were later locked up in another place and their election credentials stolen.

Adrienne Pine has an account from one of these poll workers whose tires were slashed.  The group waited until 4:40 AM for police to come and help them obtain new tires, then drove on to their polling places.  This group were representatives of LIBRE.  They were met at the polling place by a group of armed men who controlled the location, not the military, who they report just stood around.  The LIBRE group was told it was not welcome there.  Shortly thereafter there was an altercation between the local police and the armed group, which kicked out the police, then confiscated the identity cards and election credentials of all the LIBRE workers, before kicking them out.  The armed group tried to get the LIBRE representatives to sign the ballot tally forms, at gunpoint, but at least some still refused, and all were thrown out of the polling place.  At the doorway to the polling place they saw individuals questioning voters before they entered, and they report that if the prospective voters were not voting for Juan Orlando Hernández, they were not permitted in to vote.

LIBRE formally asked the TSE to invalidate the tally sheets from those precincts, but the TSE counted them.  You can see one such acta here. 

Here's how to read it.  The polling station was issued 320 ballots.  That means that there are 304 citizens eligible to vote there, plus up to 16 party representatives (which adds up to 320 ballots).  In the vote count, they reported 308 valid votes, plus 16 nullified ballots, which is 324 ballots, four more than they were issued or should have needed.

Not only did the TSE count this acta, signed by 4 poll workers and two alternates (none of them LIBRE members): it ignored the over-vote. 

This means that somehow, in the TSE's vote counting software, the check for more people voting than ballots issued either isn't implemented properly, isn't implemented at all, or someone at the TSE ignored the system to OK this acta. 

Given the OAS report of its audit of the vote counting software, it is not unlikely that an over-vote test either wasn't implemented, or didn't work. 

This tally sheet was not even subject to special scrutiny (escrutinio especial), or it would have been issued a new, less informative vote count sheet, looking like the one found here for acta 314. 

Another example from the same region is MER 2670.  They were issued 377 ballots to cover the 361 eligible votes plus 16 party representatives.  They report the total ballots cast as 348. But the individual candidate's votes, plus blank and null votes, add up to 404!  This would mean they had a voter turnout of 112%!

MER 2687 should have qualified for special scrutiny as well.  Actas with similar mistakes were scrutinized and replaced elsewhere, but not in El Paraíso for some reason.  The acta for MER 2687 reports 320 ballots issued for its 304 eligible votes plus up to sixteen party representatives.  Six people signed the acta and on the line where they report how many people voted, they reported six. This acta, in reality, reports on 304 votes, including blank and null votes. Six of those votes were presumably by poll workers, so the effective turnout is 98%.

The TSE accepted "6" as the count of voters who voted and used it in counting how many citizens voted, which means the numbers it reports for this MER are false.  Apparently the software does not check that the number of votes is equal to the number of people who voted, a required sanity check for any such vote counting system.

MER 2691 also shows anomalies. They were issued 222 ballots for 206 eligible voters plus up to 16 poll workers.  In total, 210 votes were reported cast, and six of those were by poll workers.  That means that only 2 of the precinct's eligible voters supposedly didn't vote. That would be extraordinary.

MER 2693 shows the same issue.  They were issued 179 ballots for 163 eligible voters plus up to 16 poll workers.  They report 166 votes, and only 5 poll workers voted, meaning that only 2 of their eligible voters didn't vote.  The same can be said about MERs 2711, 2712, and 2713.

Voter turnouts in the 80-100% range should be suspect.

No poll watchers reported such extremely high turnouts anywhere in Honduras.

But in the 47 MER that comprise El Paraíso, 51% (n=24) reported voter turnout above 90%.

Only 36.1% (n=17) MER in El Paraíso reported a voter turnout of less than 85%.  If we set the threshold lower, to 75%-- still a great turnout level for Honduras-- then only 27% (n = 13) had voter turnouts less than 75%.

These are extraordinary levels of voter participation.

Extraordinary-- and suspect under any circumstances. But not troubling to the TSE in Honduras.

How to Lie With Statistics: Honduran Homicide Edition

Arturo Corrales has cut off Honduras's Observatorio de Violencia from its ability to get crime statistics from the police and coroners in Honduras. 

Julietta Castellanos, the rector of the National Autonomous University, says that Corrales has obstructed the Observatorio from getting statistics for the last 6 months of this year.  Castellanos observed that the Observatorio:

"was created in 2003 and never have we had any restriction on access to the information; the procedures and methodology for the construction of the data were a validation process done by the University, the Public Prosecutor's office, and the Secretary of Security."

The power struggle between an administration that desperately wants to make the homicide statistics look better, and the Observatorio de Violencia, that wants to transparently report on the statistics, was made clear in October, when both the government and the Observatorio released their homicide statistics for the first half of 2013.

They differed on the number of murders by about a thousand.

At that time Corrales made the argument that it was proper to change the way Honduras reports homicides to conform to the standard way the Banco Interamericano de Desarrollo counts homicides. This procedure is particularly maladapted to the Honduran situation.  It calls for a determination of homicide only when both police and a coroner agree on a verdict of homicide.

In Honduras, few homicide victims are examined by a coroner.  Coroners only operate in the major cities (Tegucigalpa, San Pedro Sula) so for there to be a determination by a coroner, the body would have to be taken from where the individual was killed, to one of these morgues.  That simply doesn't happen, for cultural and financial reasons.  Most Hondurans reclaim the body from the police within 24 hours and bury it within 48 hours of death. The existing coroners have trouble keeping up with the volume of urban homicides. But violent death is not limited to these cities.

So requiring both a police and a coroner's report predictably would lower Honduras' reported murder rate, even though nothing has actually changed.

Porfirio Lobo Sosa claimed yesterday that

"the indices of violence have experienced a notable decline,"

and continued that he often used to hear of 20-35 deaths a day, but now it seldom breaks single digits.

That is, obviously, no justification not to make the data requested by the Observatorio de Violencia public. The reasons for obscuring it are purely political. 

The government claims homicides are down, and wants to show a big reduction.  However, the way they're now counting homicides is incompatible with the way the rate was determined in past years, so whatever they choose to announce is actually meaningless.  Numbers calculated using a new method cannot be used to establish a pattern with respect to previous homicide rates. 

As Migdonia Ayestas, head of the Observatorio de Violencia told Proceso Digital:

"we cannot play with the citizenry saying that violence has diminished when we have seen that daily there are multiple crimes."

Caritas, the Catholic charity, also issued a statement lamenting the obfuscation and calling on Corrales to cease obstructing the Observatorio's access to information.

Proceso Digital seems to agree.  It closes its article:

Ever since Arturo Corrales assumed the reins of the Secretary of Security, in one way or another they have hidden the violent death statistics from the press and the citizens in general.

More Honduran Bonds Coming

Honduras has yet to place an offering of the final $250 million dollars in government bonds authorized by Decreto 183-2012 of November, 2012 in a foreign capital market, but already Congress is modifying it to authorize the placement of even more government bonds to finance current expenditures.

Through Decreto 183-2012 the Honduran Congress authorized the sale of up to $750 million dollars in government bonds, placed in domestic or foreign capital markets.  In the spring of this year, they successfully offered $500 million dollars of that in bonds that had slightly more than 7% interest.  However, when they sought to place the remaining $250 million dollars in government bonds this summer, they found the interest rate had risen to above 10% and withdrew the offer.  They have announced that they intend to try again this month to sell the last $250 million in bonds, hoping for a better interest rate.

But acting rapidly yesterday, the Honduran Congress, reportedly without dissent, amended the original bill to authorize up to $1 billion dollars in bonds, an increment of a further $250 million, because it has become clear that the original amount will not meet the financial needs of the Lobo Sosa government.

Honduras owed about $4.8 billion dollars at the start of the Zelaya Rosales administration, when it qualified for debt relief under the Initiative for Highly Indebted Poor Countries and received a total of $3.5 billion in relief. That left it a foreign debt of about $1.3 billion dollars.

As of September this year, Honduras's foreign debt was back up to $5.68 billion dollars. $842 million of that increase occurred just this year. La Tribuna reports that for 2013 so far, the debt incurred ($1.496 billion) is about 3.2 times the government income for the same period ($455 million).

Honduran sociologist  Julio Navarro notes

"The first difficulty that this government has is how to pay its salary obligations to about 205 million government employees....this is a problem for this [the Lobo Sosa] government and it's a problem that the next government will inherit."

That's why Congress is authorizing more bonds to meet the current obligations of the Lobo Sosa government.  But Navarro continues:

"The other real problem of the next government is how to negotiate the expiration of the bonds the government has with private financial institutions, like banks and pension systems; the government currently has no way to pay off this internal debt."

Yikes!

Post-Election Analysis from Honduran Experts

Radio Progreso, a project of the Jesuit organization ERIC (the Equipo de Reflexión, Investigación, y Comunicación) located in El Progreso, Yoro, has a commentary on their website with insight from a number of Honduran commentators about where the post-election phase is headed. It starts:

Two weeks after the general elections, their results continue to be the object of critique for the suspicious way in which the count of votes in the local polling places developed and the filling out of the actas electorales (vote tallies).

 
Then it moves to a series of comments from Honduran perspectives. The most intriguing of these is the perspective of the new student movement, the so-called Camisas Negras or Movimiento anti JOH. This is the group whose protests in Tegucigalpa were met with immediate suppression by the military police in the days after the vote.

Radio Progreso quotes Marcos Rubí, a member of this movement, on its origins and aims:

"it grew in the heat of what pretended to be an electoral fiesta, with university students that from before the beginning of the process already had seen certain anomalies, certain signs of fraud, and then in the electoral process of Sunday the 24th, now that the fraud was confirmed, indignation grew and we decided to organize ourselves... The Movement is heterogeneous, there are ideologies involved that run from the right to the extreme left, but there is a consensus that there was fraud and we all have the same purpose".

The disillusionment of students with the electoral process has been under-reported in the international press. University students took the place formerly occupied by representatives of the church in this election, as custodians for the individual election polling places. That means they were witnesses to the most egregious irregularities: the selling of party credentials, voter intimidation and mis-information-- irregularities international observers dismissed as minor, but that these Honduran youths (in our view, rightly) saw as shocking and unacceptable.

Honduran sociologist Eugenio Sosa criticizes the Tribunal Supremo Electoral, and was blunt about the possible impact of challenges to the TSE:  "I believe that the results will stand, the Tribunal has announced them and it isn't going to reverse itself even though they will make a pretense of reviewing the actas":

"I believe that the Tribunal, despite having launched itself affirming that these were the most transparent elections and despite having all the backing of official organizations such as the OAS, EU, the US Embassy and Department of State, little by little has been showing aspects that demonstrate that in these elections there were as many problems, irregularities, and alteration of results as in the primaries."

Hermilo Soto, national coordinator in Honduras for the Lutheran World Federarion, characterizes reforming the electoral system as a "great challenge" for Honduras going forward, because "the great problem that we have today is that the people do not trust in the present institutionality directing the electoral process".

The article notes that Congress will play a key role in determining whether and how the electoral system might be revised, as well as having a key role to play in the subsequent elections of the Supreme Court and Ministerio Público.

As we have noted previously, no single party has a large enough delegation to congress to control these processes. Radio Progreso quotes the opinion of Antonio Rivera Callejas, a re-elected Partido Nacional congress member, about what may happen:

"It's too early to talk about the composition of the junta directiva (executive committee), that is going to be defined in January, I figure, you should remember that there will be many political factions making up the congress, there will not be a simple ajority for any of the political parties, this is going to require the consensus of many... What there is not yet are concrete names, of candidates for the presidency, vicepresidency, and secretariat [of the congress], so it is normal that there are conversations among all the political parties but that will take a concrete form only in the month of January".

Sociologist Armando Orellana is skeptical of the vision of harmonious consensus advanced by Rivera, and raises instead warnings of backroom deals and corruption as usual in the negotiation of a congressional majority:

"The party of the government [Partido Nacional] is buying consciences, there has been talk of payments of up to five million lempiras [about $240,000] to procrue the presidency of the Congreso Nacional. The ally that it has had during this period [the Lobo Sosa administration] has been the Partido Liberal, nevertheless they are not going to succeed in controlling the two-thirds majority necessary to manage constitutional reforms"

This is a critical point: many of the more alarming legislative initiatives under the Hernández Congress required constitutional amendments, which sailed through with unprecedented ease due to the alliance between the two dominant parties.

Radio Progreso cites Orellana's observation that LIBRE and PAC could, along with smaller parties (such as PINU and UD) form a large enough block that, with a few Partido Liberal congress members acting more independently they could push congress in a different direction.

While Antonio Rivera dismisses this, his argument for a more centralized authority in Congress-- which is that the hegemony and harmony under Juan Orlando Hernández was critical to the legislation that the current congress passed-- actually cuts both ways: for those who question the wisdom of such rapid, unreflective passage of major changes to the legal and economic framework of Honduras, slowing down the process may be the best outcome of this election.

And Radio Progreso's coverage suggests that the incoming Congress will operate not only with internal dissent, but with the scrutiny of a newly mobilized younger generation of Hondurans whose outrage about the way the election was conducted is unlikely to be settled simply because the international community declares that this election was good enough, if not really as good as it could have been.