MercoPress. South Atlantic News Agency

Santiago's electricity company given ultimatum

In case of failure, the Government would move on to the adversarial phase, Pardow explained

The Chilean Government of President Gabriel Boric Font Thursday gave the electricity company Enel until midnight local time to reconnect the service to some 20,000 households in the Santiago Metropolitan Region (MR) where the outage reached its seventh day in a row. Energy Minister Diego Pardow held a press conference to explain the impending steps to terminate Enel's concession should it fail to deliver.

 Boric had instructed him Wednesday to review the possibility given the provider's numerous shortcomings. By Thursday Morning, Enel had managed to restore the power supply to some 12,000 customers, it was reported.

“This procedure has several stages,” Pardow said. “The initial stage is the requirement that we are starting now. In the case of the distributor, if the 20,000 customers are met by 11:59 p.m. today, that means that tomorrow we will formulate a new requirement with the next goal of compliance with the plan,” he added.

“If it is not met, we move on to the next administrative phase, which is the adversarial phase. Obviously, this is something that is in the current legislation” and would consist of reviewing Enel's concession for the MR.

Regarding compensations to the affected customers, Pardow pointed out that they would vary depending on the duration of each client's outage, provided the company agrees not to bring the case to the courts.

Thursday's ultimatum requires that Enel must comply with the new recovery plan presented, which involves the full service restoraion to all 20,000 clients during the day. In case of failure, the Government would move on to the adversarial phase, Pardow insisted. In this event, Chile's Superintendency of Electricity and Fuels (SEC) would have to determine whether there are particular responsibilities for the power cuts or whether they are “unforeseeable meteorological phenomena.”

At any rate, the ultimate penalty applis only when there are serious breaches of contract, such as the alleged failure to comply with all legal commitments. The final call lies with President Boric, albeit subject to a report from the Comptroller's Office. This process could take months and the question arises as to who would take over Enel's role after a public bidding process is opened. In the meantime, the State would have to take over the functions.

In any case, Enel is expected to challenge such a decision given the unforeseeable 124 km/h winds that caused the outage, as measured by the Chilean Meteorological Directorate.

According to the SEC, other companies needing to restore electricuty suppliy were CGE, Chilquinta, Saesa, Frontel, EdelAysén, and Luz Osorno.