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The Edesur debacle: "With the rates frozen, it was cheaper to pay the fines than to invest," according to an expert


Andrés Chambouleyron, former head of the regulatory entity, says that the State lost firepower to punish the faults of the electric company.

“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 background contest, referring to the intervention in the electricity distributor.

“There has to be a single person responsible, who can be fined and penalized

if they make mistakes.

If (the State) gets involved, 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 suburbs, goes through many emergency neighborhoods and suffers from electricity theft, non-technical losses, which are usually called 'hanging'”, details Chambouleyron.

The specialist, who was head of the ENRE until December 2019 and who returned to the private sector, gave his view on the situation of the company, the cuts and the position of the State.

Why are there so many power outages?

-As of December 2019, with the approval of the Emergency Law by the Government, the regulatory framework and concession contracts are suspended.

That is,

the rules are suspended.

A period of absolute discretion begins again, where the Government decides what rate it will apply to the companies, regardless of the rules.

- Is the State as responsible for the situation as the companies?

-There is a law that regulates the relationship between the regulator and the concessionaire.

And the only way to have predictability in investments is to have rules that are followed over time.

The Government violated that with the approval of the Emergency Law.

Today it is

a kind of “long live the pepa”, 

nobody complies with anything.

The company must say "they require me to comply with the quality standards established by the regulation, but they do not give me the rates to do so".

Will there be improvements after the intervention?

-Next summer will be worse than this.

The electrical system has four gears.

They all have to spin at the same speed.

If one doesn't spin at the same speed, that gear stalls and breaks.

And those gears are the rates, the investments, the quality of the service and the fines.

-If one fails, do they all fail?

-The four variables have to be well calculated, consistent, consistent with each other.

One cannot be altered without modifying the others, because the mechanism stops working.

When we did the only RTI (comprehensive rate review, provided by the concession 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 rates.


by freezing the fees, you also freeze the fines.

The indexer that adjusts rates indexes the fines.

Can Edesur's concession be terminated due to the cuts it experienced?

-All this is established in the concession contract, which is not fulfilled.

All the contingencies that could arise are in the concession contract


If a level of fines is reached that -by volume- reaches 20% of the billing, it could be grounds for termination.

But once the rates are frozen, the fines are also frozen and that is distorted.

- Is Edesur investing what the concession establishes?

-Companies do not invest, because investment is expensive.

They let the quality of service degrade and pay the fines.

It is cheaper to pay fines than to invest.

The mechanism is destroyed and they are not fixed only by increasing the rates.

As the macro situation will continue to deteriorate, the horizon for companies to recover investment is unpredictable.

I can't find anyone willing to sink capital into an underground pipe when you don't know what will happen in the next 4 months.

-When do you think this situation will change?

-Nobody recovers a 20-year investment if they don't know what will happen in 5 months.

The quality will continue to deteriorate.


the next government will have to take charge of this disaster

, as it fell to us (in the management of Cambiemos) after 13-14 years of degradation.


look also

The Enre equates the directors of Edesur with the terrorists of the AMIA and the Israeli embassy

Power outages in the AMBA: raid four Edesur offices to withdraw documentation

Source: clarin

All business articles on 2023-03-28

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