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¿Will the Superintendence of public utilities accept Covid 19 as cause to close the investigations for alleged irregularities in the billing of energy and gas services?

irregularidades en la facturación en los servicios de energía y gas

On August 3, the Superintendency of Home Public Services announced the initiation of investigations and formulation of statement of charges[1] to six electric power and natural gas utility companies for alleged irregularities in the collection of gas and power services during the period of health emergency generated by the COVID 19 Pandemic.  

The purpose of these investigations is to determine whether the companies failed to comply with the regulations corresponding to the actual measurement of the consumption of services and, with the provisions given by the National Government in order to alleviate the payment of public services to users, given the billing for average consumption made to its users, during the months of March to May 2020.

Some of the explanations provided by public utility companies have been based on the implementation of measures aimed at preserving the health and life of their workers during the pandemic, as well as preventing the spread of COVID 19. In this regard, it will be of great It is of interest for the Superservices to examine whether the companies faced the impossibility of measuring individual consumption of public services as a result of a fortuitous event or force majeure generated by the pandemic, and whether the providers were diligent and managed risks responsibly derived from measurement in times of pandemic. 

There are few cases in which the Superintendency of Domiciliary Public Services has filed or sanctioned investigations initiated to providers under the analysis that the breach of the obligations of the companies is due to the result of circumstances constituting a fortuitous event or force majeure. According to article 64 of the Colombian Civil Code, it is called force majeure or fortuitous event “the unforeseen or that it is not possible to resist (...) ". This must be understood as the supervening impossibility to fulfill an obligation due to an unforeseeable, irresistible and external fact. 

Precedent rulings to which the Superintendency of Public Services will have to pronounce in the framework of acts constituting a fortuitous event and force majeure, were known in 2017, with the investigations carried out to ZONA FRANCA CELSIA S.A.E.S.P and TERMOCANDELARIA S.C.A. E.S.P. for non-compliance with the provisions of article 25 of Law 143 of 1994 and article 52 of CREG Resolution 071 of 2006, for the duty to comply with its Firm Obligations in 2015 when the phenomenon of the child occurs.

These Firm Obligations are nothing more than the obligation voluntarily assumed by generating companies that take advantage of CREG Resolution 071 of 2006, to generate the energy that the Colombian electricity system requires in times of scarcity. Although both cases involve a broad technical and legal development in the matter, what happened can be summarized in the following:

  • In the first case, an investigation was initiated against CELSIA, to determine whether it had breached its Firm Energy obligations between February and March 2015 when there was damage to its Termoflores IV plant. The company demonstrated in the course of the investigation that the non-compliance with its Firm Energy Obligations was caused by acts of God and force majeure at the Termoflores IV Plant, which failed when some of the blades of its turbines broke even when ( i) said company complied with the inspection and preventive maintenance plans for its equipment, (ii) carried out preventive maintenance and (iii) constantly supervised the operation of the equipment without it being possible to foresee the loss that generated the unavailability of the plant. 

Once all the evidence presented in the course of the investigation had been analyzed, CELSIA demonstrated that the requirements were met to affirm that the unavailability of the Termoflores IV Plant responded to acts constituting a fortuitous event and force majeure, that is, they were not attributable to CELSIA, who also credited their diligence and care. 

  • In the second case, the Superintendency of Residential Public Services imposed a penalty on TERMOCANDELARIA for an approximate sum of $ 35,410 million pesos. This company, like CELSIA, in its defense argued, among others, that the breach of its Firm Obligations responded to events that are framed in the fortuitous event and force majeure; however, the Superintendency determined that no such grounds for exoneration of liability were applicable in that particular case.

Talking about this case in a few lines is impossible given the various arguments presented by the company and the importance of the ruling, but among some of its various arguments, the company stated that the assumptions of the fortuitous event and force majeure were met, given the period in which the phenomenon of the child lasted and an alleged regulatory failure in the matter. In this regard, the Superintendency did not find TERMOCANDELARIA's arguments proven and pointed out that it could not claim the materialization of its own risks as exemptions of liability and that the insufficient management of its financial risks did not exempt it from complying with its Firm Energy Obligations. 

Now, in the presence of the investigations initiated into six providers of public energy and fuel gas services, we are waiting for the analysis to be carried out by the Superintendency of Public Services, when verifying the possible existence of acts constituting a fortuitous event and force majeure against the actions implemented by the providers, as well as the evaluation of the diligence of the providers in consideration of article 22 of CREG Resolution 080 of 2019, which states that agents must diligently manage their financial and operational risks to ensure the availability and continuity in the provision of energy and fuel gas services. 



Consultora senior MarkUp