After several months of the effects of the El Niño phenomenon and more than a month following the emergency was declared in the national electrical system, the Minister of Energy and Mines, Víctor Hugo Ventura, exposes the effect on the rates of that service.
While it is expected that regulated rates for the end user will not increase or that the impact will be slight, the consumers who are facing drastic increases are those who do not have an energy contract and purchase in the spot or opportunity market as large users or industries, according to as mentioned by the authorities, since the spot price has experienced increases of around 30% in January and February and almost 50% in March, according to data from the Wholesale Market Administrator (AMM).
Regulated rate to the end user
The minister explained that a lot of thermal electricity and fuel generation has had to be called, but that with the contracts for the regulated market that the distributors have “prices and rates have been largely protected,” in addition to the contribution (to subsidize) the social rate is still important.
He added that the regulated rates for the end user “fortunately there will be a minimal impact and hopefully it will be zero,” in relation to the quarterly adjustment that comes into effect on May 1 and will be announced by the National Electric Energy Commission (CNEE). .
This rate will be in effect for the period from May 1 to July 31, 2024 for users of Empresa Eléctrica de Guatemala, SA (EEGSA), as well as for Distribuidora de Oeste, SA (Deocsa), and Distribuidora de Oriente , SA (Deorsa), which are part of Energuate.
The CNEE is the regulatory entity of the electricity sector and is in charge of reviewing the real costs of power and electrical energy purchases made during the three months prior to May by distributors to supply their regulated users.
Based on this analysis, the adjustment is made to the social rate (consumption of 0 to 300 kilowatt hours per month -kWh per month-) and the non-social rate (consumption of 301 kWh per month, onwards) that will be in force in that quarter. .
Large Users
Ventura explained that consumers who are in the free market (without a contract), “will surely suffer an increase” and “that this segment, more than anything, are industries or large users.”
The average spot price represented an interannual increase of 49.9% in March 2024, going from US$115.47 per megawatt hour (MWh) in March 2023 to US$175.13 in the same month of 2024.
Already in January and February, increases of more than 30% were reported, also year-on-year, and stood at US$105 and US$108 per MWh respectively.
In other markets such as Mexico, it has been observed that in March the average spot price had an increase of 54.4% but stood at US$61.95, while that of the Regional Electricity Market (MER) registered an increase of 85.6%, up to US$217.22
CNEE: No rationing
Luis Ortiz, president of the CNEE, explained that the situation of blackouts or rationing will not be reached, and that to this end the AMM, which is the operating entity of the national interconnected system, has the necessary tools to avoid it, for example, by calling to the generators of different resources such as bunker or coal or others, reduce exports and other measures that that entity is already applying.
Those that are experiencing an impact are the spot prices, he confirmed, since the more bunker or other fuel is used, the spot prices may be higher and those who supply from that market are exposed to that price volatility.
However, this does not have such a direct impact on the issue of regulated rates for the end user due to several factors: because the rates for the current quarter (February to April) are in force and the new adjustment will not take effect until May 1st.
The costs that are collected for the application of rates from May to July is what happened from February to April, but it is not a critical condition either, he adds.
In the case of regulated rates, distributors have contracts for several years and should not have any influence. “Supply risk for rationing is not seen, it is not a scenario because there is enough (generation) capacity,” but the issue is fuel supply, Ortiz added.
The coal plants have supplies and the mills, at the end of the harvest in mid-May, generate little with coal, and current forecasts indicate that it is expected that winter can come earlier since the arrival of the La Niña phenomenon is expected. stated the president of CNEE.
“These are scenarios that cannot be predicted, but one does not see a risk of rationing on the horizon” and even if the mills might not be supplied with coal, that scenario is not seen, he added.
At the end of the harvest, the combustion of biomass continues until the second or third week of May, which helps to avoid a risk of shortages or rationing because there would already be a coincidence due to the onset of winter, adds Ortiz.
End user rates in effect as of April
For the Non-Social rate segment, until April it was Q2,308 per kWh for Deocsa users and Q2,178 for Deorsa users; while for EEGSA consumers it remains at Q1,469.
This group includes consumption of 300 kWh and above, with around 0.2 million users, equivalent to 6% of the country’s users.
For the Social Rate segment, which covers consumption from 0 to 300 kWh per month, prices are Q2,177 per kWh per month for Deocsa users; Q2,084 for Deorsa clients; and Q1,381 for those of EEGSA, according to the Commission report.
An extraordinary contribution is also applied to the social rate segment through the National Electrification Institute (Inde), for users from 0 to 88 kilowatt hours (kW/h) per month. In this way, those who consume from 0 to 60 kWh per month only pay Q0.50 per kWh. And, those who consume from 61 to 88 kWh, pay Q0.98 for each one.
Consumption of 89 kWh or more does not have this extraordinary subsidy. This segment includes 3.4 million families, which means 94% of the total users, according to the CNEE.
The new quarterly adjustment comes into effect on May 1.
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