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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Carlos Blanco who wrote (10280)	3/18/2004 4:07:48 PM
From: russwinter	Read Replies (5) of 110194

Typical 2004 train wreck news: Argentina cuts power supplies amid shortage worries Reuters, 03.18.04, 3:58 PM ET BUENOS AIRES, Argentina, March 18 (Reuters) - Argentina's power market regulator has ordered cuts in electricity to dozens of major factories due to shortages in natural gas supplies and a dry weather spell that has hit hydro-electric plants , energy sector sources said on Thursday. Cammesa, which regulates the wholesale power market, ordered reductions in power supplies of up to 20 percent to factories of major companies such as steelmaker Acindar <ACI.BA> and a Peugeot auto factory. "The cuts will be in effect until the weekend and then there will be another evaluation ... but these problems of natural gas and the dry spell will not disappear overnight," an energy sector source said. Some analysts blame possible power shortages on a long economic crisis -- GDP contracted by a fifth between 1998 and 2002 -- that effectively kept companies from investing in the sector. Experts say firms need to invest some $900 million a year to keep up with demand. Public utility rates were frozen in January 2002. While the government has relaxed these rate freezes, it could take years before the sector ends a bottleneck in supplies as the economy slowly recovers. Energy demand also tends to grow at the start of the southern hemisphere's winter. Planning Minister Julio De Vido, who is responsible for the power sector, said the government would guarantee power supplies to residential users and companies that have paid for more expensive "No Interruption" power contracts. The minister said power cuts so far had been directed at firms with cheaper energy contracts that allow for cuts in supplies from wholesalers. Major foreign firms operating in the sector include Electricite de France <EDF.UL> and Britain's BG Group Plc <BG.L>.

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