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dam-l LS: Solution to Electricity Crisis on the Horizon



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Date: May 3, 1999

Subject:  Solution to Electricity Crisis on the Horizon

Subject: El Mercurio, La Tercera                 

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	SOLUTIONS TO ELECTRICITY CRISIS

                    ON THE HORIZON

                   

                    Nature and a little political pressure combined this weekend

                    to give reason for optimism that Chile's festering energy

                    crisis may soon see a solution. 


                    Heavy rains in southern Region VIII all day Saturday and

                    Sunday helped raise levels in the Laja reservoir, thus

                    allowing the continued operation of national power generator

                    Endesa's Antuco, El Toro and El Abanico generators. Until

                    the rains, all three generators were expected to have been

                    pulled out of operation for lack of water, a situation which

                    would have precipitated even more severe energy rationing. 


                    Also promising was the agreement reached this weekend by

                    the government and power companies Endesa and Gener for

                    the provision of 500 additional megawatts of power needed to

                    reinforce the Central Interconnected System (SIC) power

                    grid, which provides power to some 90 percent of the

                    country. 


                    Endesa, responsible for 55 percent of the country's

                    production, promised to invest some US$140 million to

                    produce 303 additional megawatts for the SIC within 90

                    days. Second largest provider Gener said it would negotiate

                    the purchase of 200 additional megawatts from autonomous

                    providers. 


                    And Tratabel, part-owner of the county's third largest

                    producer, Colbun, said it would purchase majority control of

                    Colbun (40 percent is owned by the state) in order to

                    increase its contribution. Colbun is the owner of the

                    Nehuenco plant, whose unanticipated shutdown earlier this

                    year compounded the electricity shortage. 


                    No decision, however, has been made regarding who is to

                    pay for this new energy investment, and most of the new

                    energy agreed upon will not be available before late August. 


                    The decision by the energy companies to work with the

                    government may have been hastened by new legislation now

                    working its way through Parliament to protect consumers. It

                    is expected to become law in 10 to 15 days. The proposed

                    law, currently in the hands of Chamber of Deputies' Mining

                    and Energy Commission, won't provide retroactive

                    compensation to consumers for power cuts that started in

                    February, but will raise fines dramatically. 


                    The deal between the government and the companies also

                    calls for the creation of a national electric energy savings

                    commission to help voluntarily reduce energy consumption.

                    City lights and billboards that have been glowing brightly

                    throughout the energy crisis will now be turned off in

                    response to the crisis. 


                    "After five days the facts demonstrate that we're on the right

                    path and that we have the means to overcome this situation

                    as soon as possible," said Interior Minister Raul Troncoso. 


                    Troncoso said electricity rationing could be eased or

                    eliminated entirely in the next few weeks, but he was careful

                    to note that a return to normal rainfall levels would be

                    necessary. University of Chile geophysics forecasters,

                    however, predicted there would be little recovery this year

                    from the current drought, one of the main causes of the

                    current electricity crisis. 


                    The new energy savings commission, headed by

                    Presidential Secretary John Biehl, will set savings goals and

                    propose concrete methods to achieve them. It will be made

                    up of government authorities, electricity company

                    representatives and major energy consumers. President

                    Eduardo Frei also ordered the implementation of internal

                    government plans aimed at achieving a 10-percent drop in

                    electricity use by government entities. 

                                                                          

*Chile Information Project

*The End*

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Monti Aguirre

Latin American Campaigns 

International Rivers Network					

1847 Berkeley Way					

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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