"A power outage again left without electricity several neighborhoods of the city of Buenos Aires, Rosario and Buenos Aires. Residents of Caballito and Flores took to burn trash cans in protest. There were blackouts in Palermo, Núñez, Belgrano, Villa Urquiza, Villa Crespo, Olivos and San Isidro."

The news was published this morning on the cover of the newspaper La Nacion, but it could be from any day of the last summer, when the power outages punished vast sectors of the metropolitan area and placed under review two specific issues: investments of companies providing electricity and controls (or lack of) by the Government.

In this context, a report by the General Audit Office (AGN, for its acronym in Spanish) indicates that in recent years, a "deterioration in the provision of electricity" is evident and state controls are "not effective", to the point that -at the time of the investigation- the two energy distribution companies in the metropolitan area, Edenor and Edesur, owed more than $ 82 million for shortcomings in their work and could not be verified that these fines were paid or if they credited bonuses in favor of users.

The agency responsible for overseeing the distribution concessions of electricity is the National Regulatory Authority for Electricity (ENRE, for its acronym in Spanish), whose work was considered by the AGN in a repor approved of the end of last year, based on data collected between January 2011 and June 2013.

Courts and Fines

In its report, the Audit explains that when deficiencies are noted in the service of electricity "ENRE started the sanctioning process towards the Distributors."

However, these processes do not always reach completion. In fact, the technicians observed "both the non-payment of fines as well as the lack of accreditation of bonuses" to those affected by power outages, and pointed out that "at the time of the study, the amount owed by both companies amounted to $82,294,403.44." Of that total, $55,189,204.07 correspond to Edenor and Edesur $ 27,105,199.37.

The AGN highlights the lack of effective controls of ENRE, the "delays in the implementation of fines" and the subsequent "failure of distributors."

Follow Up

In fact, the work of the AGN is a "progress report" that sought to determine whether the ENRE regularized observations included in previous audits, approved in 2006 and 2011.

Among those observations the "delay" which recorded the regulator when it comes to fulfill two of its most important tasks is highlighted.

It was, first, to the issuance of records called "Order of calculation and Bonuses Associated Indicators for Quality of Service".

Despite its long title, the process is not difficult to understand: with the orders, which are semi-annual, ENRE asks distributors to calculate the quality of their service; then, companies present their results, in which the credits to be received by users for failures in providing recognize and report the payment of the fines by certified documentation. The circuit closes with the control that makes the regulator on these papers.

When?, fines apply when users suffer more blackouts in a semester-compared with a previous period, if unplanned outages are greater than three minutes, or if scheduled outages extend for longer than required.

Well, in previous audits, the average delay, counting from the moment that closed one semester to the issuance of the Order of calculation, was 369 days. But this latest research warns that the performance increased, reaching an average of 492 days, "having detected a case of minimum period of 291 days to Edesur and, at the other end, (a delay) of 635 days to Edenor" points out the AGN.

Secondly, the other task in which the ENRE delays is checked in making records for "Failure to meet information gathering and processing of information."

These are documents also for each semester, in which the regulator is analyzing the data provided by companies and search for "inconsistencies" in the data, that is, apartments on quality service delivery and, from that, "issued the appropriate sanction resolution," explains the Audit.

Unlike the previous example, in this case there are users who charge fines, but it is the ENRE, ultimately, the perceiver of the amounts in question and compensates the victims of the actions of the distributors.

However, for that to happen, the wait may extend to three years, it is that during the work of the AGN it "led to the sanctioning body in one case (that) took a total of 1,099 days to issue." This was a record for Edenor and despite similar delay, the report shows an improvement over previous audits, which had been within 1,139 days.

And if anyone believes that the wait was excessive, there is another most striking case: during that period of almost three years, the ENRE even managed to solve a file on Edesur, then the auditors said they had to "conclude a delay up to 1210 days between the end of June and the date of response" from the regulator.

Overwhelming Force

Moreover, there is a third kind of file that the ENRE uses. It is called Major Force and it is opened when the companies report "verified all courts claiming its origin of fortuitous event," explains the Watchdog.

These records are initiated on a monthly basis and as a resolution; the ENRE accepts or rejects the arguments of the distributors. Delays are also observed here, because companies' request extensions for submission of the relevant documentation."

Moreover, after checking the contents of those folders, the AGN noted that "the stipulated administrative requirements are not followed," because they were "missing test documents" and the "signatures of those responsible."

Media Solution

Returning to the comparison with observations from previous audits, technicians stressed that "in 2009 the ENRE regulated the process by which distributors must prove bonuses fines to affected users."

To try to settle the outstanding debt, the agency enacted a provision in the 2006 investigation, for example, did not exist. The measure, in addition to the aforementioned regulations also required the companies to "submit certifications of accreditation of bonuses to users who must be performed by Independent Public Accountant and / or external auditors."

However, the AGN encountered a partial solution, because "no reports consist of certified public accountants that fines paid by users Distribution."
     
Complaints

The Audit, on the other hand, found "improvements" and even spoke of "adequacy" of the databases of the claims made by users, which had already been recommended in previous reports.

However, it is argued that "there are still problems," such as that "unless entering data or information is repeated, and claim numbers, making it impossible to identify each case."

With these uncertainties, the AGN "gives the recommendation adopted by the previous report", while acknowledging that "the situation resulted in a new observation," which is to "train the staff (ENRE) and real-time access information systems operated by concessionaires."

A Long Cohabitation

In 1992, by resolution of the Energy Department's Office it was decided that companies Edenor and Edesur concession assume the distribution and marketing of electricity for a period of 95 years, which means that both companies will be borrowing service, and they must be controlled by ENRE until the year 2087.