“The government will not be able to sue Edesur, because it is part of the company. What we are seeing shows a serious conceptual error”, says Andrés Chambouleyron, former president of the electricity regulator (ENRE), chosen by a fund competition, referring to the intervention in the electricity distributor.
“There must be a single person responsible, who can be fined and sanctioned if you’re wrong. If (the state) gets in the way, it is already co-responsible for what the company does », he criticizes.
“Edesur’s network is underground, unlike Edenor’s, which is aerial. (Edesur) has the poorest areas of the periphery, passes through many emergency neighborhoods and suffers from electricity theft, non-technical losses, which are usually called ‘hangings’”, Chambouleyron points out.
The specialist, who headed ENRE until December 2019 and who has returned to the private sector, gave his views on the situation of the company, the cuts and the position of the state.
Why are there so many power outages?
-Starting from December 2019, with the approval of the Emergency Law by the Government, the regulatory framework and concession contracts are suspended. That means, the rules are suspended. A period of absolute discretion begins again, where the Government decides which rate it will apply to companies, regardless of the rules.
– Is the state responsible for the situation as much as companies?
– There is a law that regulates the relationship between regulator and concessionaire. And the only way to have predictability in investments is to have rules that are followed over time. The government violated it by passing the Emergency Law. today it’s youa sort of “viva la pepa”, nobody does anything. The company must say “they require me to comply with the quality standards set by the regulation, but they do not give me the fees for doing so”.
Will there be improvements after the surgery?
-Next summer will be worse than this. The electrical system has four gears. They must all spin at the same speed. If one doesn’t turn at the same speed, that gear stops and breaks. And those gears are tariffs, investments, quality of service and fines.
-If one fails, do they all fail?
-The four variables must be well calculated, consistent, consistent with each other. You can’t alter one without changing the others, because the mechanism stops working. When we did the only RTI (complete tariff review, foreseen by the facilitating framework) in history, it was established that there should have been another one in 2022. When the new government arrives, in December 2019, it freezes the tariffs. AND, By freezing taxes, you also freeze fines. The indexer that adjusts the rates indexes the fines.
Can the Edesur concession be interrupted due to the cuts suffered?
-All of this is stipulated in the concession agreement, which is not fulfilled. All contingencies that may arise are in the concession agreement. If a level of penalties is reached that -in volume- reaches 20% of the billing, it could be grounds for termination. But once the tariffs are frozen, the fines are also frozen and this is distorted.
– Is Edesur investing the amount established by the concession?
-Companies don’t invest, because the investment is expensive. They let the quality of the service degrade and pay the fines. It is cheaper to pay fines than to invest. The mechanism is destroyed and cannot be fixed only by increasing the tariffs. As the macroeconomic situation will continue to deteriorate, the horizon for companies to recover their investments is unpredictable. I can’t find anyone willing to sink capital down an underground pipe when you don’t know what’s going to happen in the next 4 months.
-When do you think this situation will change?
-No one recovers a 20-year investment if they don’t know what will happen in 5 months. The quality will continue to deteriorate. AND the next government will have to deal with this disasteras it happened to us (in the management of Cambiemos) after 13-14 years of degradation.
Source: Clarin
