The same feeling felt by thousands of São Paulo residents without electricity for days was shared by Chileans in August, when 60,000 people spent more than a week in the dark in the metropolitan region of Santiago. What unites the two groups of customers, besides the inconvenience, is the company that has the electrical concession: the Italian multinational Enel.
The company, now in the spotlight of public debate in Brazil, also operates in at least seven other countries in Latin America. In Chile, it recently gained prominence: the target of criticism from President Gabriel Boric’s government, it was rejected by the population in public opinion polls and, now, it could be removed from the electrical concession.
Just over a month ago, in a first instance decision that was considered historic, a Santiago court ordered Enel to pay compensation to 127,000 customers which, together, totaled 8 billion pesos (around R$48.3 million) .
The case is related to a massive blackout in Chile between January 29 and February 2, 2021, which left thousands of customers without electricity in and around Santiago. The decision taken after a lawsuit filed by the Chilean National Consumer Service can be appealed, but the decision was celebrated.
Conflicts with public authorities were accumulating. Also in August, the Chilean Electricity Superintendence fined Enel around 4 billion pesos (R$24.1 million) for problems in energy distribution following heavy rains in May. The agency said that the multinational provided misleading information during the crisis.
The situation escalated to the point where the multinational was targeted by Gabriel Boric. The president declared that his administration is evaluating the overthrow of the electricity sector concession, a natural monopoly, to Enel. The contract with the company is for an indefinite period.
At the time, Boric said that there is a “serious ineffectiveness” of electricity companies that has affected not only the capital Santiago but also at least five other large regions.
At the debate table, the possibility of nationalizing part of the distribution of electricity appeared, an idea floated by the Minister of Energy, Diego Pardow, for whom it would be safer for society to have part of the service under the responsibility of a state-owned company. But opposition from other ministers meant that the idea was removed from the discussion.
The cases were adding up and, in a recent public opinion survey by the Cadem institute, the best known in the country, 63% of respondents stated that they agreed with the government’s action to begin analyzing the end of the concession. For another 33%, the measure is exaggerated.
Also last September, the Electricity Superintendence once again notified Enel for allegedly not complying with the rules for distributing energy to at least three people who depend on electrical devices to breathe. The three users died during the first week of August, when 20% of the country experienced a blackout.
According to the superintendency, Enel “did not deliver the required aid equipment to two of the three patients who died, failing to comply with obligations established by the concession”. Some of these users were without power for almost two and a half days.
Company shares in Peru go to China
To the north of Chile, in Peru, Enel has also undergone recent transformations. In the Andean country, the company’s shareholdings were sold this year to Companhia da Rede Elétrica do Sul de China, an Asian public company, for US$3.1 billion (R$17.6 billion).
The importance of sales comes when looking at the broader picture. Enel was responsible for providing energy to just over half of Lima’s population. The other half corresponded to Luz del Sur, which in 2020 was also purchased by a Chinese state-owned company.
Therefore, practically 100% of the electricity distribution market in the capital of Peru is in Chinese hands, something that was criticized by the National Society of Industries of Peru.
The group claims that Chinese dominance could harm the national interest and that it certainly restricts free market competition.
