The company, meanwhile, ruled out that the efficiency plan had considered network maintenance.

Enel’s union: cost cutting is cause of slow service restoration

The Union of University Professionals of Chilectra, today Enel Distribución, assured that the slow restoration of service in some areas is a consequence of the cost reduction or efficiency plans applied since 2000 by the Spanish Endesa and, later, the Italian Enel.

“The time has come to review the model of the electricity distribution company that we have today, a model where the totality of the field operations rests on contractors, with contracts that become increasingly precarious, while the company’s profits increase,” said the union entity.

They accuse that the precariousness of these services has worsened since 2015, when the Italian company promoted a new plan, which resulted in new and significant cost reductions, especially in its contracts with external companies.

“Today it is not attractive for contractors to work on emergency plans, since the contracts are more profitable in the construction of new networks than in attending to failures,” they said.
It was announced that the company plans to apply a new 15% adjustment.

On Tuesday, the general manager of EneL Distribución Chile, Andreas Gebhardt, was asked about the impact of the efficiency plans and ruled out any savings in maintenance.

“On the contrary, we have strengthened with technology, with elements of protection and safe operation and also invested in the development of complementary suppliers, in order to have greater peace of mind and guarantee the continuity of resources during long periods such as four or five days of continuous work, in which the work regimes have to be 24 hours”, he pointed out.

Systep criticizes regulation

Lack of flexibility for distributors to develop solutions to improve the quality of their services through adequate remuneration is the criticism that the consulting firm Systep, linked to the academic Hugh Rudnik, makes to the current regulation of this sector. The entity states that although the regulation promotes an efficient system, it does not encourage operational improvements and automatisms, but rather emphasizes asset investments, potentially transferable to tariffs.

“The objective of this regulation is to minimize investment and operating costs, complying with quality indexes, but it does not explicitly seek improvements in distribution networks,” says Systep.