5 The electricity law also resulted in the creation of an _Economic Load Dispatch Center_ (ELDC) to coordinate the activities of all generating companies--in other words, it is essentially a generators' pool. Its specific objectives are to achieve the minimum total operating cost for the system as a whole and ensure equitable market access to all generating companies. Each member of an ELDC is entitled to make direct supply contracts with clients for amounts up to its available firm capacity. Any shortfall has to be purchased from other members at the marginal cost of peak power, equal to the annual cost of increasing installed capacity during peak demand periods by one kilowatt. The ELDC plans daily production and computes the instantaneous marginal energy cost by considering the variable costs of generating units currently operating, independently of any direct supply contracts there may be. The programming of electricity generation, disregarding supply contracts, gives rise to energy transfers between generators, and these are priced at the system's instantaneous marginal energy cost.

The last key government actor of the sector is the Superintendence of Electricity and Fuels created in 1985. It was set up as an administrative branch of the Economics Ministry. It supervises compliance with the law and regulation and monitors the quality of services. Finally, it deals with users' and suppliers' complaints and prepares the information for the price-setting process carried out by NEC.

The multiplicity of these institutional actors and their lack of independence may be the most salient feature of these institutional arrangements. The only apparent form of independence in the whole system stems from the role of the antitrust commission. The regional Comisiones Preventivas and the Comision Resolutiva seem to have the required independence but in dealing with the electricity sector they may lack the required technical skills to make the most of their independence.

_The outcomes._ Overall, performance has improved greatly with deregulation and privatization.<sup>4</sup> Coverage rates have reached 97% and over 70% of the required investment has been done by the private operators. Consumption has grown at an average 8 percent between 1986 and 1997.' Energy losses are about a third of its historical levels (less than 8 percent in recent years). Labor productivity has doubled (from less than 300 clients/employee at the end of the 1980s to almost 600 by 1997). Similarly, the number of GWh of output generated per worker went up from less than 5 to almost 8.

# _Argentina_

Following partially the models adopted for the electric sector in Chile and the United Kingdom, and in order to allow competition in those stages of industry where it is possible, the new legal framework of electricity vertically separated the industry. Generation, transport, distribution and supply (or commercialization which is an activity which was not unbundled in Chile) were separated and legal restriction were put to prevent reintegration. But in many ways, one of the most innovative aspects of Argentina's reforms is the introduction a quite a rigorous set of processes. In fact, this is one of the things most systematically copied by most other

> 3The firm capacity of each producer is the maximum power which its generating units can contribute in the peak period of the system with a reliability exceeding 95%.

> 4 A more analytical assessment of the welfare gains of utilities deregulation and privatization is provided by Galal (1992) and Luders (1993) and summarized in a critical survey by Paredes (1995). The growth rate was almost 9% between 1990 and 1996.