An interview with Christian Gosse, former commercial director of the Buenos Aires utility Edenor
“I arrived in Argentina in 2002 at the height of the crisis, but I believe we have made significant progress since then,” said Christian Gosse, former commercial director of the Buenos Aires utility Edenor.
Interviewed by Smart Energy International in August, shortly before being recalled to France following the sale (to Grupo Dolphin) of a majority shareholding in Edenor by Electricité de France (EDF), Gosse said that at the time of his arrival there was a high level of non-payment for electricity, amounting to some Arg$50 million (US$18 million) per annum, but that this has now been reduced to Arg$31 million (US$11 million) per annum.
“In 2002 the total losses were about 13% but they now stand around 11%, with the technical losses at 7% and the non-technical at just over 4%,” he said, noting that this is a good level for South America and that it would be very difficult to bring the figure down any further.
Edenor is the largest utility in Argentina, with some 2.4 million customers in the north of the Federal Capital and the province of Buenos Aires, and a turnover in 2004 of 305 million euros.
Gosse, whose experience spans the technical, operational and customer areas – and whose experience of Latin America includes a two-year lectureship in Venezuela – has been responsible at Edenor for issues such as the buying of electricity and tariff setting and standards and processes, as well as the establishment of four commercial agencies for residential customers and another for the approximately 5,000 large customers, encompassing areas such as metering, meter reading, billing and customer service.
But if one project stands out it is the development of prepayment within Edenor, which was started shortly before his arrival with a pilot project of 100 meters in the district of Escobar, some 30 km distant from the centre of Buenos Aires. Despite the absence of a vending machine and the fact that customers had to go to Edenor’s office to purchase electricity, this indicated the potential for prepayment.
“The key issue for us is customer satisfaction and this little project demonstrated that,” said Gosse.
This gave rise in 2003 to a larger project of 4,500 meters in another district, Merlo. This project, which is ongoing, has demonstrated a high level – greater than 90% – of acceptability.
“These are poor clients who are unable to pay a monthly or bimonthly bill,” said Gosse. “They live from day to day and buy little by little, and so prepayment is close to their way of life.” Indeed, he noted, this concept is now being taken up by other companies, citing as an example shampoo manufacturers who make available shampoo in sachets.
Gosse commented that a key to the success of the implementation – and to limiting electricity theft – is the availability of pay-points close to the project homes. “If people have to go too far to buy electricity they are likely to steal it, because the effort to get there is too great,” he said, adding that much work is currently being put into investigating other options for the sale of prepay electricity, such as a GSM-based system in which the sale of electricity is linked to that of telephone cards. However these are limited by the poor (fixed) telephone network and the non-affordability of technology such as the Internet in areas like Merlo.
Gosse said that in the light of the results of the Merlo project, Edenor proposed to increase its prepayment deployment up to 100,000 meters over the next four to five years, and a proposal for this was submitted to the regulator in July 2004. However to date no response has been forthcoming.
FOSTERING PREPAY DEVELOPMENT
“Without an answer the project cannot be started,” he said, adding that he hopes the new shareholder in Edenor will share the same vision about the development of prepayment technology within the utility.
He also comments that the frozen tariff for residential customers, as well as political interest in the introduction of a social tariff, do not foster the development of prepayment in Argentina.
Gosse said that the Merlo project “shows clearly” that prepayment is ideal for a country like Argentina, and others in Latin America with a high level of poverty. “We need a way to supply electricity to the poor without them having to steal it and without needing to make disconnections, and prepayment offers a sustainable solution that is compatible with the way of life.”
Noting that prepayment has attracted the stigma of discrimination, since it is seen as being for the poor, he said that at present in Argentina the customer is able to choose whether or not he wants prepayment. And he believes that its further development should be based on regulatory, rather than political, considerations – but he would also like to see its use linked to the rational use of energy, including the use of energy efficient appliances and lighting in homes, for which there is little incentive at present.
And so Grosse heads back to France and EDF’s commercial division. “For a European it’s very easy to adapt to the living conditions in Argentina,” said Gosse. “It’s been a very good experience.”