Argentina To Audit Power Distributors As Rate Complaints Surge

Argentina's national electricity regulator, ENRE, will audit the country's top three power distributors to see if they have been overbilling consumers, Planning Ministry Julio De Vido said at a hastily arranged press conference late Friday.

De Vido said the government hasn't authorized higher rates since October. Nevertheless, there has been a dramatic increase in the number of consumer complaints regarding overbilling in electricity bills, he said.

"We're going to review the distinct claims we've received to see if the number of complaints is related to a billing problem or if there has simply been an increase in consumption," De Vido said.

The audits apply to Edenor (EDN); Edesur, controlled by Endesa SA (ELE); and Edelap, controlled by AES Corp. (AES). Spokesmen for the companies weren't immediately available for comment.

De Vido said the government will fine the distributors if they have inappropriately raised rates. He said ENRE will conduct its audit this weekend and could draw conclusions as early as Monday or Tuesday, though it is unclear how the government will be able to carefully study the matter in such a brief period of time. De Vido said the government will cut subsidies on households that consume more than 1,000 kilowatts per billing period.

The government has been seeking ways to cut subsidies to the energy industry in a bid to reduce spending and meet its financial needs in other areas.

In July 2008 the government allowed distributors to raise residential power rates for the first time in seven years. Since then consumers have been complaining about disproportionate increases in their bills. Similar complaints have been made about natural gas bills.

Argentina's residential gas and electricity rates are among the lowest in the world. Distributors say higher rates are needed to ensure profitability.

-By Taos Turner, Dow Jones Newswires; 5411-4103-6728; [e-mail]