Friday, June 2 2023 Sign In   |    Register

News Quick Search



Front Page
Power News
Today's News
Yesterday's News
Week of May 29
Week of May 22
Week of May 15
Week of May 08
Week of May 01
By Topic
By News Partner
Gas News
News Customization


Pro Plus(+)

Add on products to your professional subscription.
  • Energy Archive News

    Home > News > Power News > News Article

    Share by Email E-mail Printer Friendly Print

    A government trapped, with no way out?

    March 22, 2023 - CE Noticias Financieras


      Felipe González, the former president of the Spanish government and historic leader of that country's socialism, often says that a methodology of populism is to propose simple answers to complex problems. But, as those simple answers usually do not work, the next step is to find an enemy to blame for the failure, and

      in Argentina we are in this situation today with respect to a problem that has been dragging on for about 22 years. One of the questions to be asked is to what extent the country is still trapped in an agenda that was raised in 2001 and that we still have not been able to solve: how to pay for public energy services?


      is a discussion that has been dragging on since that moment and because it has not been solved it has become an enormously complex problem,

      not only how to pay for public services and energy but also the derivations of this problem that has to do with the services provided by the energy companies, with fiscal issues due to the excessive subsidies and with monetary and exchange rate issues, because as we have to import a lot of energy we have turned a sectorial issue, which is energy, into a macroeconomic problem that affects the reserves of the Central Bank (BCRA) like no other


      The political class is reluctant to explain this complex problem to the people, among other things because it is painful.

      Edenor y Edesur abrirán la audiencia por el nuevo cuadro tarifario de la luz


      government has just given an answer, the one that Felipe González's thesis imagined, which is to find an enemy and intervene the company Edesur with the mayor of Avellaneda, Jorge Ferraresi, who is going to manage the energy company while he continues to govern Avellaneda

      . He

      has already been a minister, has left his post, returned to Avellaneda and now he is in charge of the energy problem

      . First, there has been a record heat wave in the first 15 days of March. The electricity demand increased in the area covered by Edesur by 60% compared to the electricity consumption in March last year. There was a high consumption peak in January of 4,100 megawatts and in the first days of March it was 4,554 megawatts.

      That is to say,

      it exceeded January.

      Vecinos cortaron Garay y Balcarce por falta de luz desde hace cuatro días

      Neighbors cut Garay and Balcarce due to lack of electricity for the last four days

      What happens when there is an excess of demand? What would happen in New York, Paris or Berlin: there are supply problems because it is very irrational to make an investment in infrastructure for the eventuality that may occur once every five or ten years that there is a heat peak. So, what the systems foresee is that in those moments there will be a shortage in the service and they look for ways to compensate that shortage, with rotating cuts, putting generators, alerting the population to consume less.

      Now, there is a second problem that is specific to the Metropolitan Area of Buenos Aires, especially the area covered by Edesur, which is the southern part of the city of Buenos Aires and the southern part of the suburban area. What is this peculiarity? They are very densely populated neighborhoods, where traditional neighborhoods of low houses have changed their physiognomy and now have large buildings and towers. Does the State, the National Government and the municipalities, which have a responsibility in this, control that when towers are built, when there are high buildings, there are reinforced power supply lines or do we still have the same lines as when those neighborhoods were low and also old lines?

      Operativos por los cortes de luz en la ciudad

      Operatives due to power cuts in the cityThe

      company defends itself. They say that they did not invest. They could say: "How are we going to invest if we have a historical tariff delay of sidereal percentages in a country with inflation and the tariff is not adjusted? In the last 20 years, only during 16 months the distribution tariff that goes to households, industries and final consumers -not the generation and wholesale transportation- covered the cost of distribution. There is a gigantic tariff backlog that is covered with increasingly unbearable subsidies for the Treasury.

      La Argentina debe debatir mucho más allá de Edesur en materia eléctrica. El sistema energético está roto y desquiciado en el país de Vaca Muerta.

      The energy system is broken and unhinged in the country of Vaca Muerta The

      consumer should be told something painful: that in energy terms this is a two/three star country. We have decided to be a two/three star country in terms of energy efficiency and electricity and gas consumption because we have used energy to generate the feeling that this input, this good, was practically free. Something similar happens with transportation, where one pays a free fare and pretends to have first world transportation. Well, you have to adjust the expectation with the price and that is a problem that is difficult for a politician to say and raise because it implies an enormous cost, which entails saying that there is a fantasy that is living above the expectations or what is paid for that kind of life.

      Demoras en Estación Constitución

      Delays in Constitución Station

      There was, besides the heat stroke and the tariff delay, an episode at the beginning of March, when the Atucha power plant went out of operation. This produces a general imbalance in the whole electric system of the country, and it happens here or in any other place in the world that when they start operating again or when this electric load is replaced on the system, there are usually failures and collapses. For example, in this case, an Edenor transformer burned, about which the company owned by Daniel Vila and José Luis Manzano, friends of Sergio Massa, gave very little information, and also an Edesur transformer station in Quilmes burned, about which there was information.

      Incendio en la cercanía de la Central Atucha II

      Fire in the vicinity of the Atucha I power plant When

      one looks at the ENRE's web page, it seems that a great number of users who do not have service from Edesur are charged and the same number of users who do not have service from Edenor, which belongs to friends of the minister, is not charged. This is a doubt. A curiosity. But the difference in level is very significant. If the company is intervened there will be a whole legal discussion on whether or not there is a regulatory framework that allows to intervene. Surely we will find arguments on both sides, but what is certain is that since 2014 there are 30 people from ENRE inside Edesur, appointed by the government of Cristina Kirchner, when the energy system was controlled by Axel Kicillof. And there is also an overseer since a year ago placed by Alberto Fernández through the ENRE.

      What were they controlling during all this time? We do not know. Now we have indignant people and a demagogic solution in which the officials say that the company is to blame and that is why they are going to intervene.

      the distribution companies, among them the big ones such as Edenor and Edesur, for many years did not pay for the goods they sell. They buy a commodity, which is electricity, from a mixed company called Cammesa, and they do not pay for it with the excuse that the State does not provide them with tariffs. There was a great renegotiation of that debt, and in that renegotiation nobody asked them to explain very well what investments there were, what maintenance systems, and the issue was passed for free with great benefit for many of these distributors.

      The fact is that we have a huge energy problem. We have been turning it into an increasingly complex problem, more entangled, difficult to solve, politically costly to solve in the last 20 years. It is something that we get used to seeing on the front page of the newspapers all the time, thinking that these problems are not cumulative. The response is deficient. And not only on the part of the Government, because if you look at Horacio Rodríguez Larreta's Twitter account of the last week, before the big cuts that took place in the last days, he gives an explanation where he challenges the whole energy policy that leads to these bad performances. He does not say it clearly, but he is suggesting that if you want this energy policy you get this as a result. It would give the impression that he promises to correct the issue if he ever gets into government. But he had an unpleasant episode, an escrache at the Bar Británico in San Telmo and he came out of that explanation to say that Edesur is to blame and he filed a criminal complaint against it. Surely, before doing so, he looked at a survey.

      Why is that important? And not only in Larreta's case. There is a whole stream of politicians, especially from the opposition, who promise that when they get into government they will carry out certain reforms. One would ask them to look at the polls first. It is not that when they have to reform they look at them and stop, which is what Larreta has just done at a discursive level, not at an operative level because it is not an area he is governing. The energy issue and the distribution of electric energy corresponds to the national state. But with this discursive change it is said something like 'we do not explain anymore how things are and we prefer to find a guilty person', in fact, in order not to pay the political cost of the real explanation.

      Here there is a structural problem of politics which is who explains to the people that this system is exhausted, that it has to be changed and that those changes are going to be painful. Moreover, who explains that if these changes are not made, reality, with its own inertia, will be much more painful than a government that makes adjustments. This is a big question mark that challenges the political class in its authority in front of the citizens;

      the Government is more entangled in this problem than the opposition. What do you see when you look at the Government, the Frente de Todos, Alberto Fernández and Massa? That they are carrying out a plan to maintain a kind of sustainable mediocrity without solving the structural problems and making the different variables that may explode go along with it. Inflation is rising, reaching 100%, but the currency is also devaluating at the same time. The interest rate also rises to asphyxiating levels. The objective was to reach the elections with a gasp, without an explosion in the middle, as if the levels of recession and inflation we are experiencing today were not already a collapse. As if the collapse was only the exchange rate thermal shock. No: we are inside the collapse, this has already collapsed.

      now comes a completely predictable news, which is a drought that produces a strangulation in the level of reserves that the Central Bank can accumulate.

      a video made by the Bolsa de Cereales de Buenos Aires shows the heavy numbers that are a consequence of this historical drought linked to the heat wave and the electric demand. There is a 35% year-on-year drop of the entire national grain production of the 2021/22 campaign.

      While the behavior of the production of millions of tons of grains goes from 130 million to 84 million. As for soybeans there were 18.3 million less tons and in corn 16 million with respect to last year's 25 million and 36 million respectively. This translates into a 48% drop in exports of the sector, almost half. This means 20,811 million dollars.

      We are facing a problem of dollar supply. And we must also highlight the impact this has on the Treasury's income and the State's revenue at a time when the deficit is very high. The Grain Exchange calculates that 7,376 million dollars less will be collected by the State through taxes and withholdings. This implies a drop of three points in Argentina's Gross Product.


      other words, we are talking about a catastrophe.

      Entrada del Banco Central

      Entry of the Central BankThis

      catastrophe poses a problem, a hypothesis. Is there a way out within these economic policy coordinates? It is important because the other day I was talking to an economist and historian, who was part of several non-Peronist economic teams, and I was telling him: I notice that in the ruling party there is, due to all the internal aggressions we see, a kind of madhouse. And he told me: it is endogenous. This means that when a human group at the head of a government has the perception, right or wrong, that there is no way out, it starts to go crazy. We are entering, when we look at the Frente de Todos, in that phase,

      the dramatic economic policy options begin. We now see Emanuel Álvarez Agis, who has been one of Sergio Massa's main advisors at the head of the Ministry of Economy, hidden, discreet, a friend of his. Probably, with the same degree of influence as Roberto Lavagna. Alvarez Agis says that the agreement with the Fund must be renegotiated. This means, to question what we are going to pay to the International Monetary Fund. The opinion is important. When one asks people from the hardcore Kirchnerism what Álvarez Agis meant, they answer "We do not understand if he says it to get rid of Massa or if Massa sent him to harden a negotiation with the Fund from now on".

      Sergio Massa

      Sergio Massa

      I am interested in another pronouncement of this weekend, it is a column in Página 12 by Alfredo Zaiat. I care about what he says but more about who says it. He is an economic journalist that Cristina often quotes as a kind of guide. We do not know if it is because she is nurtured by Zaiat or because she nurtures him, or both. Zaiat says: "We must manage the few dollars we have, which are left, with national and popular criteria". This means: stop paying the Fund and suspend the delivery of dollars to companies that have maturities abroad.

      To add a little more color, this weekend also appears in Página 12 Martín Guzmán, who comes with his knife under his poncho to enjoy the problems of Massa, who was his great contradictor, his great problem during his entire term at the head of the Ministry of Economy. Now Guzmán notifies us something that Cristina Kirchner had told us in her speech in Viedma a week ago and that is that he was the tough one, and Pesce wanted to settle with the Fund. Guzmán adds that he was willing to defaulted as long as he did not make an orthodox and recessive adjustment. Will Massa be willing to do the same? Guzmán also clarifies that Pesce, who wanted the Fund to talk to Cristina, is still the president of the Central Bank. Then, he suggests without saying it during that interview: "They kicked me out and left the orthodox? What is the criterion? Guzmán's revenge.

      Pesce (presidente del BCRA) y Guzmán (ministro de Economía) avanzan en el plan

      Miguel Pesce and Martín GuzmánThese

      proposals, this climate, have two effects. One is assured. In the midst of this turbulence, adding levels of rupture, adding levels of unpredictability, what it does is to aggravate the crisis, because none of these occurrences constitutes a plan. So, probably what they do is to put more pressure on all those factors that are indicators of uncertainty, such as the exchange rate. There is another derivation of these occurrences, and it is not a safe derivation, it is hypothetical: that Massa starts to think about leaving, about slamming the door, renouncing to his traditional altruism. That is to say, Massa could, for once, think about himself and say: "I am leaving because I do not want to condemn myself to work for someone else who is going to fail". They are giving him the excuse because, most probably, if the ideas of "let's break with everything in order to look good with our electorate" start to prevail around Cristina Kirchner, thinking that the measures do not have systemic consequences, that is to say, I stop paying the Fund and everything else remains the same, with those arguments, they are building the bridge for Massa to leave. Something to which Kirchnerism tends to be very prone: to generate the best arguments for someone to leave. This could be an excellent argument for the minister, who could say: "If we start with irrationalities, I want to leave wrapped in the flag of rationality and moderation, and I will go to the opposition".

      MERLO, ARGENTINA - NOVEMBER 11: (L-R) President of the Chamber of Deputies Sergio Massa talks to Vice President of Argentina Cristina Fernandez as President of Argentina Alberto Fernandez and Governor of Buenos Aires Province Axel Kicillof gesture during the closing rally of Frente de Todos party ahead of midterm elections on November 11, 2021 in Merlo, Argentina. After losing in most of the districts in the primary elections held on September 12, ruling party seeks to reverse the results on this Sunday 14th elections. (Photo by Tomas Cuesta/Getty Images)

      Sergio Massa and Cristina Kirchner

      If this were to happen, there would be an important group of actors in the Argentine public life such as businessmen and trade unionists who would be left not only without a minister but also without a minister.candidate in the elections. Here comes an additional problem: probably, Cristina would be left without a candidate. Because there are many indications that Cristina Kirchner's strategy is to look for a candidate that fulfills the function she assigned to Alberto Fernández when she nominated him with a tweet on May 18, 2019, which is to mask the less tolerable features of Kirchnerism to attract a vote that with those very visible features would not come; and also to attract leaders, businessmen, governors who would not want to approach if Kirchnerism shows its true ideological face. That would be Massa.

      This preference of Cristina for Massa has many manifestations. There is one that is a detail, but it shows how things work in many fields. It has to do with the proximity of the alliance between Massa and the leadership of YPF exercised by Pablo González, someone of Cristina's kidney. That is to say, this relationship between Massa and YPF would not happen if there was not Cristina's blessing for Massa. This is illustrated in an account that follows aircraft movements: where the aircraft of YPF, which is a corporation with state participation listed in the New York Stock Exchange, lent its aircraft to transport the Minister of Economy to the last meeting of the IDB in Panama. Probably, now they are looking for a way for the Ministry of Economy to somehow pay for that service and make it look like they hired a plane. They are also going to say that YPF officials went on that trip. Is there a crime in this? Probably not, but there is an intersection of business and state interests that indicate an enormous confusion, which is to think that a state-owned company should be managed in a different way than a common competitive company. It is necessary to charge costs that we will not charge to a private company because they are paid by the taxpayers. In other words, it is a punishment to the taxpayer, not a privilege. The other question is why Massa does not pay for an airliner.

      YPF prestó su avión para trasladar al ministro de Economía en la última reunión del BID en Panamá

      YPF lent its plane to transport the Minister of Economy to the last IDB meeting in PanamaProbably

      , Máximo Kirchner thinks about all this differently from his mother and has another strategy. We do not know, but there are those who suppose that he believes that the failure of the Alberto Fernández experience is unmodifiable and that since they are heading for a catastrophic defeat, the best thing to do is to save the identity by bringing a candidate who retains the largest number of Kirchnerist votes: Axel Kicillof, who is clinging to Dardo Rocha's armchair in La Plata like a castaway to a board.

      He does

      not want to let go.

      Apertura de sesiones de la provincia de Buenos Aires

      Opening of sessions in the province of Buenos AiresThis is

      another strategy, different from Cristina's, which has a central difficulty. It is that Alberto Fernández intends to be a candidate and this is a huge problem for an officialism that is not willing to defend him. This is a very important break. The final axis of the conflict is Cristina Kirchner challenged by her pupil, by the one she appointed as a sort of delegate and who now says: "I want to face you". As she said off the record: "I want to put an end to 20 years of Kirchnerism". This has very important derivations because it unleashes a contradiction, a conflict, of growing aggressiveness, which we do not know where it may end, among other things because we do not see that they are very aware of the escalation that this conflict is having in its own protagonists.

      In general, from Alberto Fernández's environment, they do not attack Cristina, they attack Máximo Kirchner and Kicillof, that is, they go a little bit lower. Except for Luis D'Elía. Last week, Carlos Pedro Blaquier, who was punished by a good part of the Kirchnerist left, died. The family of the businessman could say that he was "persecuted", with cases related to human rights for which the businessman was acquitted in the Federal Criminal Court. However, Blaquier's figure for a good part of Kirchnerism is an accursed figure. In this context, D'Elía showed a real photo on Twitter in which Blaquier can be seen with Cristina Kirchner. It is a photo taken when the businessman went to present a new large-scale pork production for Argentina. From Alberto Fernandez's close relationship, they punish the Vice-President with reproaches related to human rights.

      El tuit de Luis D'Elía contra Cristin Kirchner

      Luis D'Elia's tweet against Cristin KirchnerThe

      rest are aggressions to Máximo Kirchner, such as the one of Aníbal Fernandez who said last week: "La Cámpora is a calamity". And he did not say "I was wrong", he said "it escaped me".

      Something even more important, more relevant and more cruel. Aníbal Fernández, without consulting Kicillof, sent the gendarmerie to the province of Buenos Aires, producing a very inopportune reaction from the governor, in writing, asking for a limit to the entry of the gendarmerie in the province of Buenos Aires. One wonders: if everybody wants to improve security, if security, after inflation and the economy, is one of the central axes of Argentina's electoral policy, why does Kicillof not admit the arrival of the gendarmes? It is worth remembering what Joaquín de la Torre, senator of Buenos Aires and former mayor of San Miguel, said last week in Odisea Argentina on LN+. The leader, who was also minister of the Buenos Aires government of María Eugenia Vidal, affirmed that in the conurbano "at least ten times more drugs are sold than in Rosario". That there is no violence in the province, he explained, is because "there is a monopoly in the authorization of the sale of drugs managed by the Buenos Aires Police". This statement reiterates affirmations made some time ago by the former Minister of Security Sabina Frederic. She had affirmed that, unlike Rosario, in the province of Buenos Aires, the drug game is distributed by the Police. If what De la Torre says is true, the Buenos Aires Police must have made an approach to Kicillof and asked him to resist, since his chiefs would not be willing to let Mr. Aníbal Fernández snoop into their business. Did Aníbal Fernández want to improve the security level of five localities of the province of Buenos Aires? Or did he want to produce a crisis between Kicillof and his Police? Aníbal Fernández knows this contradictions and interests like no one else. Kicillof had to fix his position in writing so that the police officers know that he defends them, so that, perhaps, they can maintain this status quo. They are playing with fire.

      Una vieja campaña de Aníbal Fernández, exbarón del conurbano, contra la droga

      An old campaign of Aníbal Fernández, ex-baron of the conurbano, against drugsThis

      also produces reactions in Kirchnerism, where they wonder what is happening in C5N, the channel of Cristóbal López and Fabián de Sousa, ex-employers of Alberto and Aníbal Fernández. That TV signal went for an interview with the person who wanted to shoot Cristina Kirchner, Fernando Sabag Montiel, who said that he was not part of any plot. A situation that, therefore, would prove that no democratic pact was broken. In the Instituto Patria they wonder what the evolution of this move is. They also found out that De Sousa and his right-hand man, Julián Leuda -former deputy chief of Alberto Fernández's team of advisors- meet once a week with Lucas Nejamkis, Jaime Stiuso's private secretary. And, in fact, Stiuso also participates in those meetings with the management of C5N when he is in Buenos Aires. Does this have to do with the things that happened or are going to happen to Cristina? Surely they do not meet to speak well of the vice-president. For this very reason, an alarm signal was lit in Cristina's entourage.

      in the

      framework of complicated fights, in Kirchnerism they are also looking at other things. They observed a tender of the Chief of Cabinet, in charge of Agustín Rossi, with the signature of Aníbal Fernández, for US$ 3 million. It is a direct award to a semi-ghost company, Seguridad & Identificacion Consulting, which has a capital of 3,500 euros -with only one director, French, Beatrice Delaunois, based in Madrid- to provide services and training in the field of cybersecurity. It is likely that this Tuesday there will be requests for reports in Congress from both the opposition and Kirchnerism to know what this contract is about.

      In the midst of this growing contradiction, the question is whether it is possible for the group led by Alberto Fernandez to coexist with the one led at the same time by Cristina Kirchner in the same electoral bid through a Paso. Or if there is going to be a rupture. Cristina must be evaluating it. She does not have the same possibility as in 2017, when she opened from Peronism and competed with Unidad Ciudadana. She can today manage the Peronism of the city and the province of Buenos Aires through La Cámpora. However, in both Peronisms there are dissidences. Juan Manuel Olmos, Alberto Fernández's deputy chief of staff, launched last week with Leandro Santoro, the first candidate for deputy for the City in the elections of 2021, a nucleus challenging Cristina. In the Federal Capital, what was, apparently, united, is beginning to separate and


      similar logic is taking place in Juntos por el Cambio. Mauricio Macri, who is in the ideological antipodes of Cristina Kirchner, is, in turn, in a similar position to her in terms of the chess game. Although he may not be able to win the elections -he is still evaluating what he will do- he can control the group in the face of an "Alberto Fernández" who insubordinates himself to him, that is Horacio Rodríguez Larreta. If one wants to simplify the internal of Juntos por el Cambio, one has to say that the confrontation is Macri against Larreta. Macri still does not know if he is going to run or not. What you have to look at, however, is that every day he is campaigning for president. He arrived from Europe and, jet lagged, he went to campaign in Rosario with the excuse of the book "Para qué", as Cristina did with "Sinceramente". He will also go to Córdoba. And in each visit he makes, he measures his acceptance to know if he will run. He plans to turn this card in May, just days before the registration of candidacies. In the meantime, just in case, he is also Patricia Bullrich's campaign manager. He sends all those who want to support him to talk to her. He even gets financing for her. There are common points to analyze in both fronts. If one were to hypnotize Cristina Kirchner, one could discover that what she seeks for the benefit of the Frente de Todos is to have Macri as candidate on the other side.

      security is at the axis of discussion of all this. In Rosario, Macri recalled that he worked there together with Patricia against drug trafficking. Larreta answers this Tuesday. He will announce that he fired Marcelo D'Alessandro from the Buenos Aires Ministry of Security and that he appointed Eugenio Burzaco, Patricia Bullrich's second in command at the Ministry of Security. Burzaco, one of Pro's most prominent experts on security matters, is at odds with Bullrich. For his part, D'Alessandro is leaving office because of the leak of his alleged Telegram chats. Close to him they wonder why, if perhaps eleven phones were tapped, the conversations of one or two phones were known. Among the hacked devices is that of Daniel Angelici, Boca's former president. Who would be interested in spying on Angelici and, at the same time, in taking care of him so that his chats are not known, as D'Alessandro's are? It is just a question.

      Larreta designó a Eugenio Burzaco en el Ministerio de Seguridad.

      Larreta appointed Eugenio Burzaco to the Ministry of Security

      .in view of all this panorama, Milei is growing in the polls. At the Government House, a survey has arrived in which there is a scenario of a tie between three forces, Frente de Todos, Juntos por el Cambio and La Libertad Avanza de Milei. The libertarian has the advantage of not having to explain how things are going to be done because he is far from winning. What matters, however, is that Milei puts a drop of doubt on the quality of democracy. Not only about the quality of public spending, of the State, or the political class. He says that the country's problem began in 1916 with the universal vote and that he spends a good part of his life throwing darts against the founder of the restored democracy, Raúl Alfonsín. If one puts a large magnifying glass, there is a problem of values in that discourse. But Milei has a huge advantage. Macri argues with Larreta and Cristina argues with Fernández. He does not have to argue with anyone, he only has to talk to the people.


    Other Articles - International


       Home  -  Feedback  -  Contact Us  -  Safe Sender  -  About Energy Central   
    Copyright © 1996-2023 by CyberTech, Inc. All rights reserved.
    Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.