Oil powerhouse Venezuela struggles to keep lights on

By Brian Ellsworth

SAN FELIX, Venezuela (Reuters) - Despite having some of the world's largest energy reserves, Venezuela is increasingly struggling to maintain basic electrical service, a growing challenge for leftist President Hugo Chavez.

The OPEC nation has suffered three nationwide blackouts this year, and chronic power shortages have sparked protests from the western Andean highlands to San Felix, a city of mostly poor industrial workers in the sweltering south.

Shoddy electrical service is now one of Venezuelans' top concerns, according to a recent poll, and may be a factor in elections next month for governors and mayors in which Chavez allies are expected to lose key posts, in part on complaints of poor services.

The problem suggests that Chavez, with his ambitious international alliances and promises to end capitalism, risks alienating supporters by failing to focus on basic issues like electricity, trash collection and law enforcement.

"With so much energy in Venezuela, how can we be without power?" asked Fernando Aponte, 49, whose slum neighborhood of Las Delicias in San Felix spent 15 days without electricity -- leading him to block a nearby avenue with burning tires in protest.

Just next door, Carmen Fernandez, 82, who is blind and has a pacemaker, says she has trouble sleeping through sultry nights without even a fan to cool her.

Experts say Venezuela for years has skimped billions of dollars in electrical investments, leaving generation 20 percent below the level necessary for a stable power grid and increasing the risk of national outages. Officially Venezuela has a capacity of 22,500 megawatts for a population of 28 million people, but a sizeable proportion is not working, analysts say.

And while Chavez has won praise for investing in health and education, his government has done little to repair local distribution systems that deliver electricity to end users, from barrio residents to business and industries.

'GOD HEARD ME'

Pastora Medina, a legislator representing San Felix and nearby cities suffering chronic power problems, this month tried to bring the issue up in the national Congress in Caracas, but the legislature's leadership refused to let her speak.

Several hours later, as the legislature discussed a South American integration plan created by Chavez, Congress itself lost power for around 10 minutes.

"Congress wouldn't listen to me, but God must have," Medina said with a chuckle as she recounted the incident later at her office in San Felix.

Though it is a key oil exporter, most of Venezuela's power comes from hydroelectricity generated in dams in the southeast, near Brazil, and sent to the rest of the country. The remainder comes mainly from aging oil-fired plants.

The transmission system is also suffering from underinvestment, which makes it vulnerable to the failures that caused this year's blackouts.

The government has responded by building dozens of tiny local plants that generate a fraction of a percent of national consumption, a model known as "distributed generation" used in Cuba, where a U.S. embargo impedes electrical development.