On the third and last day of the public hearing to discuss the new gas and electricity service rate increases, the focus was on the segmentation plan designed by the Ministry of Economy, in which it seeks to remove the subsidy from the 10% of the population with the greatest ability to pay. On the government side, the presentation did not have more details than those already published, nor was it communicated how much the increase will be for those who will not have more subsidies.
On the part of the companies, their representatives admitted that they were not invited by the Government to design the segmentation and warned that the implementation will take at least two months.for which the new rate charts would not be ready in June, as Minister Martín Guzmán wants.
The first to make this statement public was Claudio Bulacio, manager of the Association of Electric Power Distributors (Adeera), the chamber that represents 49 companies throughout the country, including Edenor and Edesur. “Distributors do not participate in the process of defining the segmentation presented. At first, it seems that it is not planned to be applied throughout the country”, he indicated.
“In the proposal of the Secretary of Energy it happens that the information deficiency or the relationship between the user and the owner of the supply could lead to some implementation issuesto which it is necessary to adapt the commercial and billing systems of the companies, and this process surely cannot take less than two months”, he added.
The same concern was shared by Daniel Martini, executive director of the Gas Distributors Association (Adigas), the chamber made up of the country’s nine distribution companies (including Metrogas, Naturgy and Camuzzi). At the public hearing she referred to “the limitations that will manifest with the start-up”.
“Segmentation requires that companies receive from the authorities the list of users assigned to each rate segment. The new scheme implies modifications in the computer and billing systems of the distributors that, even without knowing details and based on similar experiences, the distributors estimate a minimum term of eight weeks and that it will have a significant costMartini said.
And he offered concrete data: “In 2022 and by instruction from Enargas, communications were sent to more than 3 million users so that they could update their ownership data and the voluntary response was barely 2.5%”.
the distributor edenor He also took the opportunity to make his position public. “First, we want to clarify that we do not participate in the process presented by the Secretary of Energy on the segmentation plan. No one has consulted us about it and therefore we have no information on how it will be implemented.beyond the technical report prepared by the Undersecretary of Energy Planning”, said the representative of the company, Federico Méndez.
Gas and electricity bills represent the rates for three services: the cost of gas or electricity generation, transportation to consumption centers, and distribution to different households. Of the three segments, the only one that is officially subsidized throughout the country is the cost of gas and electricity generation, of which the State covers about 75% with transfers from the Treasury. In the Ministry of Economy they seek that the residential user pay a higher value than that cost, but being dollarized, each month the percentage of coverage is reduced because the collection of the invoices is in pesos.
In addition to the official subsidy, in the metropolitan area of Buenos Aires (AMBA) there is another dynamic with electricity, which does not happen with gas. Edenor and Edesur are the only distributors that depend on the National State; the others are regulated by the provinces. This difference means that each distributor receives different rate increases, depending on the will of each governor.
In the AMBA, the situation of Edenor and Edesur it depends on the Electricity regulator (ENRE), which in the last three years allowed an increase of only 31%. Distributors do not receive subsidies in theory, but they do so indirectly, since they finance themselves with Cammesa to cover their costs., the state-controlled company in charge of electricity dispatch. That is to say: Edenor and Edesur do not pay Cammesa the totality of what it bills them for the cost of generation, but rather they are at a collectability level of 60%. In practice, therefore, the AMBA has an additional subsidy to the rest of the electricity users in the country, which is accounted for as debts of the distributors with the State.
“The wholesale price must be the same for all users and only those who are in vulnerable conditions should be subsidized. As the difference between price and cost is large, the process has to be gradual and predictable for users and for the energy sector. In addition, the subsidy to the value added of distribution should be reduced, since, in the absence of updating their income, there is a second subsidy received by users of the electricity sector”, Bulacio said, referring to the AMBA situation, without naming it.