2024-01-09 03:30:00
Parallel to the public hearing to define the gas rate, The national government is preparing the electricity bill in which another blow to users’ pockets is expected.due to the delay in prices added to the large percentage of subsidies that the invoices have. 2023 closed with a jump in the cost of generation and a drop in what demand pays and the Government seeks to reverse this trend, hand in hand with new increases.
According to the calendar, in the case of electrical energy Two public hearings will be held towards the end of the month (January 26 and 29) and they are expected to approve strong increases, just as will happen with gas.
Less than a month ago, in a television interview, the Minister of Economy, Luis Caputo, had assured that the removal of energy subsidies would be carried out within three years.
However, yesterday the Secretary of Energy, Eduardo Rodríguez Chirillo, presented the official proposal for the gas case in which The elimination of subsidies for the PIST gas price component was set in three months (and in equal parts), until April 2024.
Although this will apply only in the case of gas, It is a confirmation of the adjustment plan that the Government had announced -although faster- and an indication of what might happen in the electric energy public hearings at the end of the month. In addition, a marked impact is expected on middle class households.
On January 26, the public hearing will be held to define the user rates of Edesur and Edenor. the two distributors in Buenos Aires under the concession orbit of the Nation and that serve as a reference for the rest of the country. While on Monday, January 29, the hearing will be defined to define the value of energy transportation, which impacts the entire country.
It is worth remembering that public hearings are not binding, which means that the Government is not obliged to pay attention to the proposals made, both by companies and the population.
Electricity rate: how were the increases last year
Increases in the seasonal price of energy (what pays for demand) were carried out within the framework of rate segmentation that launched the national administration of Alberto Fernández.
In the case of users of Level 1 (high income) The price was changed in February, May, August and November. Since May they began paying the full cost of the invoices. The two increases that followed were aligned with the increase in the cost of the elements of the rate.
For those in Level 2 (low income), the same seasonal price has been maintained since June 2022. While for those at Level 3 (middle income), In February, a seasonal price increase was applied. Those who were not registered in the official Registry (RASE) paid the same rate as Level 1 users.
“Despite the implemented rate increases, the accelerated depreciation of the currency throughout 2023 led to a significant decrease in the dollar price of electricity paid for by demand,” analyzed from the specialized consulting firm, Economía y Energía ( E&E).
Electricity rate: demand covered less than 56% of generation costs at the end of 2023
Homes and small businesses, which represent regarding 75% of the country’s total demand, paid less than 55% of generation costs, on average, in electricity bills in November. The difference was covered by the State with large subsidies.
This is clear from the latest official report from the Wholesale Electricity Market Administration Company (Cammesa), corresponding to November. The official data for December and the accumulated total for 2023 will be published during the second half of January.
The total energy subsidies made by the Government last year it will end in a total (equivalent in dollars) above 10,000 million. Between January and November of last year, Cammesa received 56% of the total allocated by the State to cover the costs that users did not pay with their rates.
- 15,3%
- This is what increased the average cost of electricity generation in November over October.
In line with what Cammesa’s latest report stated, the average cost of electricity generation (monomic price) increased in November by 15.3% compared to October. While in interannual terms it increased by 83%.
In parallel, what the demand pays (seasonal) It was reduced by 5.7% compared to what was seen in October. Compared to the same month in 2022, the data shows that it rose another 82%.
Converted to pesos, the Cammesa report shows that in November the monomic cost reached $20,345 per MWh (US$ 56.4/MWh), and the seasonal price was $11,323 per MWh (US$ 31.4/MWh). This is a difference of regarding $9,022 and allowed 55.6% of the generation costs to be covered.
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