Govt. intervenes PSEG utility

The government of Argentina's Entre Rios province has taken control of local power distributor Edeersa and cancelled its concession, the provincial government announced. Edeersa is a subsidiary of US company PSEG. The move "temporarily" to intervene Edeersa "guarantees not only the continuity and quality [of power supplies] but also the continuity of a source of labor," the government said, adding that it would soon invite bids from the private sector to run the company. PSEG abandoned its 90% interest in Edeersa in late March after failed attempts to sell the company, and transferred the shares to a trust fund benefiting current Edeersa employees, including existing shareholders. The government called this a "serious incident" and said that the transfer dumped a US$86mn non-convertible debt on the utility, contravening a number of legal norms. Furthermore, the transfer did not give control of the company to workers as claimed, and was simply a move to gain tax benefits in the US, the Entre Rios government said. The government has accepted offers from workers' unions Consulyf and Fatlyf to administer Edeersa until it is resold to private ownership and has created a new company, Compania Entrerriana Distribuidora de Energía (COEN), which is 99% owned by the provincial government, to take charge of power distribution in the state. Edeersa serves 235,000 clients. Provincial elections in Entre Rios are due in two weeks.