Technical problems with electricity infrastructure generated economic losses of just over 866 million pesos for the state-owned Federal Electricity Commission (CFE) last year, a 16.2% increase compared to 2018.

According to a new federal auditor’s report for 2019, the CFE lost 866.07 million pesos (US $43 million) because power it supplied to the electricity grid didn’t reach consumers due to transmission problems.

The figure is 120.6 million pesos higher than the loss in 2018, which totaled 745.5 million pesos. Losses in gigawatt hours increased 10.7% last year to 8,609 from 7,773 in 2018.

The losses are caused by the overheating of conductors in transmission infrastructure and other technical problems. As expected, losses are greater on old power lines.

The increase in losses occurred despite the CFE having taken steps to rectify the problems. The company implemented two programs that were designed to reduce transmission losses by repairing or replacing faulty infrastructure but they were unable to stanch the bleeding.

The auditor found that a trust set up by the CFE in 2017 to fund four other projects to improve transmission infrastructure didn’t actually allocate any resources to them.

The auditor’s office advised the CFE to ensure that there are sufficient financial, administrative and operational resources available to mitigate energy losses due to technical problems. The state-owned firm should work to guarantee the expansion and modernization of electricity infrastructure while complying with its objective of generating profits for the state, it said.

Electricity theft and bad debts also generate huge losses for the CFE. The director of the state company’s distribution division said in February that the CFE had overdue customer debt of 55 billion pesos (US $2.7 billion) at the end of 2019.

Source: Reforma (sp)