Electricity company Edesur cut supplies to several public spaces yesterday following the city government’s refusal to pay bills previously subsidised by the national government.
The national government had subsidised the cost until December 2011 and the city government is rejecting the removal of subsidies as imbalanced in relation to other provinces. The debt has already reached $51m but the city government claims they will not pay until an injunction is processed in the High Court to determine whether or not national subisidies should have been removed.
Several parks and fountains around the city were left in the dark yesterday due to the ongoing dispute. Edesur notified the government late last week that they would be cancelling the electricity supply for many areas of the city if the government did not pay the outstanding bill and on Monday they pulled the plug.
“Before implementing these cuts we issued a series of warnings but we did not receive any response” said Edesur spokesperson Alejandra Martínez, quoted in Pagina 12.
The dispute is over the removal of government subsidies for city electricity which Mayor Mauricio Macri’s city government feel is unjust. The current debt stands at exactly $50,904,194.25 which does not include interest accrued in 2012.
“The city government feels discriminated against for being the only province to see such a strong rebalancing of the subsidy rate” said Minister for Environment and Public Space, Diego Santilli after a Cabinet meeting this morning headed by Mauricio Macri.
Santilli claims that the removal in government subsidies would lead to a city government expenditure of $300m for the year. According to sources from Edesur in conversations with Pagina 12, the city government has already refused to pay the $7-10m each month necessary to support electricity consumption in the city. Macri is unwilling to increase city government spending on lights, water and gas to correspond with the reduction in national subsidies.
“The subsidy was removed and we are presenting an injunction to reject this discrimination by the government” said finance city government minister, Nestor Grindetti, quoted in Pagina 12. “On top of this, we have a rule that dictates we do not have to pay until the end of the year, so we don’t need to pay.”
Macri’s government has referred to an arrangement between electricity companies and the government, in which the government can obtain compensations from electricity companies. These are charged within electricity customers’ bills and accrue at the end of each year.
Edesur has confirmed the existence of this mechanism but state that these compensations do not apply for the amounts the government refuses to pay.
The national government decided to reduce the amount paid out for lights, water and gas across the whole country last December. As a part of this decision, subsidies covering the city government were also reduced. The city government received warnings starting last week that services would be cut if payments were not made. Edesur spokespeople have confirmed that more will take place if a conclusion is not reached soon.
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