BUENOS AIRES -(Dow Jones)- Argentine power company Edelap, which is controlled by U.S.-based AES Corp. (AES), on Thursday denied any wrongdoing after Argentina's electricity regular, ENRE, filed charges against Edelap in a federal criminal court earlier in the day.
"We deny all of these charges," an Edelap official said. "We have confidence in the justice system."
An official at Argentina's Planning Ministry, which oversees energy policy, confirmed that ENRE had filed charges in Criminal and Corrections Court No. 27, but didn't provide more details.
On Tuesday Planning Minister Julio De Vido met with U.S. Ambassador Earl Wayne to discuss "grave irregularities" at Edelap. De Vido told Wayne that Edelap had engaged in "irregular" accounting practices.
Such practices "directly benefit AES" but "significantly deteriorate" Edelap's ability to make "necessary investments" in distribution capacity, according to a statement late Tuesday from the Ministry.
Edelap denied that its accounting practices are in any way unusual or inappropriate.
Edelap's "accounting records reflect its net assets, economic and financial situation according to Argentine accounting norms and it has been audited regularly and repeatedly by internationally respected independent auditors," the company said in a statement.
Edelap has reported negative net income annually since 2003, the company said. "Despite this, (Edelap) has prioritized investment in service, fulfilling all its obligations under its concessionary agreement and with the (electricity) regulator..."
Between January and September of this year, Edelap has invested some 26 million pesos ($7.6 million) in Argentina, the statement said.
The Planning Ministry statement said ENRE had detected the accounting problems. These practices, according to the statement, "put at risk the investment necessary to supply electricity."
Booming economic growth has led demand for electricity to rise by about 6% annually since Argentina's 2002 economic meltdown. However, for most of that period energy prices have been frozen, creating a major disincentive for companies to invest in production and distribution capacity, industry officials say.
As a result, Argentina has had trouble producing enough power to keep up with demand. In the summer and winter months, when temperatures rise or fall in the extreme, the government often rations power.
Edelap serves some 292,000 users in and around the city of La Plata just south of the capital, Buenos Aires.
The company has invested around 182 million pesos ($53.3 million) since 1993. About 76% of that took place before Argentina's 2002 financial collapse, when the government froze power rates.
The government has recently begun to let rates rise for residential and commercial gas and electricity, but analysts say the rate hikes are insufficient to spur new investment.
-By Taos Turner, Dow Jones Newswires; 5411-4590-2421; taos.turner@dowjones.com
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(END) Dow Jones Newswires
December 04, 2008 17:27 ET (22:27 GMT)

Publié le 04 Décembre 2008 Copyright © 2008 Dowjones