Myths and the Electric Mafia

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One of the aspirations of residents of the Aisen Region is low-cost energy. Lately, Aisen residents are also demanding better quality energy.
 
This issue has been exploited, like so many others, by practically all of the political candidates. But afterward, unfortunately, they remain mere promises. It is also how began the myth how the myth that Aisen has the most expensive energy in Chile.
 
In recent years dedicated to trying to understand the national energy issue -- and to get the issue out from behind the four walls in which the companies with absolute impunity deal with the energy issues -- we have learned a lot. We have, for example, discovered that the most expensive electric rates in Chile are not in Aisen, but incredibly they are in the Bio Bio, where Endesa has built a series of large dams. There, as in Aisen, Endesa also once upon a time promised the locals “cheap energy.”
 
We have also discovered that the Chilean electric industry is concentrated among three companies: Endesa (which is connected to Enersis and the Italian transnational Enel), Colbun and the transnational AES. We also know that Endesa has around 80 percent of the non-consumptive water rights in Chile, 96 percent of the water rights in Aisen, and about 99 percent of the rights in the Baker River watershed. In addition to that heavy concentration of water rights, Endesa’s parent company Enersis controls much of Chile’s energy distribution network while the energy transport system is run by Transelec (owned by the Canadian-based Brookfield).
 
This oligopoly in which they arrange the things amongst themselves for sure gives them tremendous negotiating power before the government. In private, executives from smaller electric companies tell us that it is a virtual mafia, in which these companies obtain excellent prices (the price of electricity in Chile is the highest in South America), get approval of projects and block or frustrate any emerging competition. As such, one energy manager told me that the energy situation in Chile is “rotten to the core.”
 
Moreover, the profits obtained in recent years by these companies are superlative; profits at the expense of the consumer of course. For sure, this economic power they also utilize to maintain their dominant position, along with lobbying and influencing politicians, marketing, and publicity aimed at cleaning their image.
 
Another discovery we have made is that our electric, vertical, regional monopoly in Aisen (how can such monopolies still exist in this country and where are the regulators?) is the owner of a closed system with exceptional rules. Edelaysen (which belongs to the U.S.-based PSEG Energy) is not obligated to increase within its energy mix renewable energies produced by other generators, such as is done in the Central Interconnected System in central Chile. That is why various smaller scale hydroelectric dams or wind farms which could provide a cheap source of energy for the electricity market in Aisen are ignored.
 
How? Perhaps somewhere in there they are going to accommodate the law? There are alternative energy companies interested in selling cheap energy but they can not. They are confronted with a monopoly in the distribution network in which it leaves them only the option of selling directly to consumers or trying to join the northern part of the electric line of HidroAysen. If things continue on this way, we are likely to find us some day soon hearing the promoters of HidroAysen trying to justify their proposed transmission line as a way to transport more alternative energy, marketing their project as “green.” As things stand now, the stamping of “green energy” and downplaying the use of fuelwood as a fuel, are but demogoguery.
 
Do you know any politician or official that is doing anything to change such silliness?
 
Most of all, what we have learned over the years is that in the electric market and the need for more energy in this country, what is in the national interest matters little and less still the interest of the simple consumer.  
 
 
Photo courtesy of Defensa Patagonia 
 

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