Paradoxically, Edesur’s administrative intervention took place at a time when distributors in the metropolitan area They have the best service quality record in recent years, according to official measurements. The other apparently dissonant fact is that, with the sequence of tariff increases arranged from April, lDealer cash under scrutiny will strengthen more than 260% this quarter.
After prolonged blackouts in the midst of the last intense and unusual heat wave, the National Electricity Regulatory Authority decided to intervene in the southern distributor for 180 days, entrusting this responsibility to Jorge Ferraresi, former mayor of Avellaneda.
It’s more than one symbolic gesture of the Government to appease the fury of consumers left without service in the torrid days of a decision with concrete operational repercussions in the provision, already monitored by the representatives of the regulatory body.
However, the apparent attack against the company led by the Italian Enel, in the middle of the sale process, can hardly lead to a revocation of the concession, the maximum possible sanction for the successful tenderer who fails to fulfill his obligations, despite the weaknesses of the benefit.
THE glassy legal situation The current state of electricity privatisations, with contracts under permanent review and provisional tariff agreements, makes any definitive judgment difficult.
But according to monitoring by Enre itself, Edenor and Edesur have progressively improved the conditions for providing the service in recent years, beyond the prolonged cuts that many users suffered during the last heat peak, expressed in statistics that are still processing stage.
One of the evaluation mechanisms available to the regulatory body is that of the frequency and duration of supply cuts, which are half-yearly average.
According to the latest information available, referring to the period April/September 2022, the average interruptions per user were 7 average hours per semester for the southern distribution, one hour above Edenor (if one does not take the palliative of “force cuts” ). elderly”).
Those values are well below what was recorded in the previous moments and without reaching the maximum foreseen in the original contracts, 10 hours of cutting in that period.
The SAIDI (according to the initials that identify this parameter) averaged 15 hours towards the end of Mauricio Macri’s mandate and the beginning of Alberto Fernández. But it had comfortably exceeded 30% during Cristina Kirchner’s career (2013-2014).
When these values are not satisfied, fines apply. Only if these economic sanctions exceed 20% of the billing for a period, then could the door be opened for eventual nationalization.
There are other performance indicators that enable the same but linked to specific events and, perhaps, of more discretionary application. Among them, some serious non-compliances such as leaving users without benefits for an extended period.
They are concessions for 99 years, which do not concern the goods: these belong to the National State, which in theory could recover them at the end of the license. Or before, in the event of a situation that favors the early closure of the premium.
On faults and trials Walter Martello, controller of Enre, has suggested in public statements that this could be a way to recover full state sovereignty over this private service, without causing a lawsuit for damages for the shareholder. If there is “fault” of the private partner, there would be no right to compensation through ICSID (World Bank Tribunal) or any other international arbitration.
However, this task does not seem easy and there is no government spirit to throw out those who are trying to make a sale, which could result in the appearance of local buyers, with a more fluid dialogue with the government.
The legal situation of these concessions is precarious as the original contracts have been patched up several times. The tariffs have been weighted and independent of the costs, and the public fund has intervened in the activity through subsidies that help to cover them.
Today it is underway “temporary tariff review” and any increase is available in the “definitive” account. Originally, the tariffs could be reviewed every 5 years or, exceptionally, on very special occasions and in a process which did not exceed six months.
In this precarious and widespread frameworkENRE has authorized two adjustments for the price of light in the metropolitan area (Capital and Conurbano), which will significantly improve the revenues of distributors.
The distribution value added will increase by 108% in April and 74% in June, accumulated implies a 261% cash restructuring of the companies.
Since the distribution is only a part of the bill paid by the end users, the impact of this adjustment is minor and differentiated according to the level of each consumer, assigned by the segmentation in place.
Residential consumers in the metro area defined as median income (between $177,000 and $619,000) will have a total increase of 68% in the quarter; the high-income, 43%, and the low-income, 114%.
This is explained by the fact that the cost of electricity itself is lower in the lower income bracket because they benefit from higher subsidies. Hence, the distribution has a higher relative weight in these tabs.
Source: Clarin
