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dam-l LS: Government Energy Proposal Raises Question Marks
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CHIP NEWS
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Date: April 28, 1999
Subject: Government Energy Proposal Raises Question Marks
Sources: La Nacion, El Mercurio
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GOVT ENERGY PROPOSAL RAISES
QUESTION MARKS
President Eduardo Frei's call to increase output among the
generators in the nation's main power grid prompted a strong
response from the firms, which said any such hike ought to
be accompanied by rate increases to cover associated
costs.
Frei called Monday for an increase in output among the
generators of the Central Interconnected System (SIC)
power grid of 500 megawatts, about 15 percent of its current
capacity, to address the energy shortage gripping much of
Chile. He didn't say how the increase would be achieved, but
said it wouldn't be subsidized by the government or through
rate hikes.
Generators responded swiftly Tuesday, saying they would
be willing to increase output only if a rate increase were
implemented to cover costs of doing so. Jose Antonio
Guzman, president of Endesa Chile, the nation's main
producer, said the firm is willing to invest US$100 million to
increase its capacity by 200 megawatts. But he conditioned
the investment on a rate hike, adding that the turbines that
would generate the new power probably couldn't be
operational until August or September.
Meanwhile, Oscar Landerretche, head of the National
Energy Commission (CNE), warned that the daily outages
affecting the SIC, which stretches from northern Region III to
Region X in the south and covers 85 percent of Chile's
population, could be prolonged to six hours. Users in the
SIC, including the Metropolitan Region, currently face
outages of three hours a day, implemented on a rotating
basis from area to area. But Landerretche said that would be
extended if new energy resources aren't found, or if more
generators develop technical problems and go out of
commission.
Frei, whose call Monday also included proposals for new
regulations in energy matters and a plea for consumers to
cut energy use, said that the 500 megawatts of unused
energy is already available in the system. But Emilio
Pellegrini, president of the board of directors of producer
Colbun, said Frei's figures were wrong, and counseled the
president to get better advisors.
He further stated that Frei's proposal may be useful in
preventing energy shortfalls next year, but that it is
insufficient in addressing the current situation. The only way
to address the immediate situation is to increase
conservation among consumers, he said, or to raise rates to
pay for new generators.
One of the most severe droughts on record has reduced
output at the nation's hydroelectric generators, helping
create the energy shortage. Programmed blackouts were
implemented last November and they were resumed in late
March and could continue until June.
Landerretche indicated that power generators with low power
supplies could buy energy from other producers, at higher
rates as stipulated by law, and thus alleviate the crisis. But
he said the government wouldn't force them to make such
purchases because to do so would be tantamount to turning
the entities into government operations. Some of the
changes proposed by Frei on Monday, however, aim at
forcing deficit producers to make such purchases.
Meanwhile, other sources said the government may consider
becoming a power generator if Frei's calls and measures
don't have desired results.
*Chile Information Project
*The End*
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Monti Aguirre
Latin American Campaigns
International Rivers Network
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Berkeley, CA. 94703 USA
Phone: 510 . 848.11.55 and 707 . 591 .91.49
Fax: 510 . 848.10.08
e-mail: monti @irn.org
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