Energy losses are equivalent to the difference between energy purchased and energy sold.  These losses represent the energy that is lost during transmission and distribution within the network as a consequence of natural heating of the conductors that transmit electricity from the generating plants to the customers and the remainder of our energy losses are primarily due to illegal use of our services and administrative and technical errors.  Energy losses require us to purchase additional electricity to satisfy demand and our concession allows us to recover from our customers the cost of these purchases up to a loss factor specified in our concession for each tariff category. Our energy losses are very close to the level of losses for which we are fully reimbursed under our concession (10%) and we believe that our energy losses are low compared to other electricity distribution companies in Latin America.
At the time of our privatization, our total energy losses represented approximately 30% of our energy purchases.  Beginning in 1992, we implemented a loss reduction plan (plan de disciplina del mercado, or market discipline plan) that allowed us to gradually reduce our total energy losses to 10.0% by 2000.