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# Acuerdo Marco

In 1994, with a view to including the inhabitants of the shantytowns and poor neighborhoods as customers of the distributors Edenor S.A. and Edesur S.A. (and, in turn, diminishing nontechnical losses), a four-year Guidelines Agreement was signed between the above-mentioned companies, the National Executive Power and the Executive Power of the Province of Buenos Aires. Different categorie& of needy inhabitants were defined. The National State pledged a contribution equal to 18% of the net billing for users included in the Framework Agreement. This contribution was used to cover the unpaid balances of the shantytowns, .and the amount left over was allocated to the payment of the $20 million assigned to each distributor, discounting the municipalities' contribution (6%) and the province's contribution (9.5%) for electricity infrastructure works.

The Province of Buenos Aires had to cooperate to ensure that the distributors could enter the shantytowns to install meters to control consumption. It also had to contribute 9 _.5_ % of the taxes levied on distributors investing in electricity infrastructure works in shantytowns and poor neighborhoods, according to Decree-Laws 7290/67 and 9038178. Moreover, the province was in charge of disseminating the contents of the Agreement among the municipalities, and negotiating their entrance into individual agreements. The municipalities had to collaborate to ensure that distributors had access to meter installation sites. They also carried out a census of the inhabitants and dwellings and opened up streets. The regularization process also included paving the way for the inhabitants to obtain title deeds in relation to their property. Moreover, the Municipalities waived the 6% municipal tax that was to be included in the bills collected from shantytowns and low-income neighborhoods and installed public lighting systems that prevented the theft of electricity, bearing the costs of installation and maintenance expenses.

> The distributors waived their right to any claim and/or collection of bills, surcharges and

> interests accrued since 1992 due to direct connections or any other unlawful or irregular use of electricity. They also pledged: 1) to install collective meters and issue a monthly payment notice for each group according to the established tariff; 2) to comply with the installation of at least 10,000 meters a month; and 3) not to cut off supply to the shantytowns and to carry out a population and dwelling census in the poorest neighborhoods, informing the population beforehand. They could

> only cut off supply in individual cases due to non-payment or unlawful appropriation of energy. After a first analysis, it is possible to conclude that the Framework Agreement seems to have

> worked well, widely achieving the initially proposed targets. It included 650,000 users out of a population of around 3 million inhabitants.

Before the Agreement was signed, many inhabitants in the poor neighborhoods or shantytowns were illegally connected and did not pay for what they consumed. They also used electricity inefficiently (for high electricity-consuming devices, heating of the dwelling, or cooking). Moreover, their connections were unsafe (there was a high rate of accidents in which people were electrocuted) and the electric devices used in their homes were damaged (refrigerators were burnt out, for example). As a result of this Agreement, pre-assembled cables were laid, which prevented clandestine connections, and meters were installed (an average of 10,000 a month). In this way, the company improved its billing rate (the current collection rate stands at 85 % ) , and the quality of service. The high degree of compliance is because the meter installation has made it possible to cut· off supply and available substitutes are prohibitively expensive.

The Agreement was regarded as a good method for channeling strong social reactions to the prohibition of illegal connections and at the same time, it proved to be a successful means for disseminating the use of electricity and constructing the pertinent infrastructure. Extreme debts were covered by the state, the Province of Buenos Aires and the municipalities of Greater Buenos Aires (only two of them, San Isidro and Vicente Lopez, did not adhere to the Agreement). The Agreement favored the building of streets and the definition of property rights, an issue very favorably regarded by most of the neighbors. It must }?e remembered that in Argentina, it was believed that the payment of public service bills gave the inhabitants the right to own the land.