Opposition MPs call for short-term bill to extend electricity bill subsidy to middle class – La Discusión 2024-07-07 09:43:18

With the arrival of winter, electricity costs usually rise. However, an even sharper increase is expected in 2024 due to the implementation of the Value Added Distribution (VAD), a new regulation that allows companies to adjust previously frozen rates.

Energy Minister Diego Pardow said the price increase was due to the price freeze during the pandemic.

“These increases are necessary for the system to function, they cannot continue to wait,” he said.

As of July 1, consumers will begin to experience increases in their electricity bills. These increases will be influenced by three additional factors: the cost of energy, the cost of distribution, and adjustments in transmission rates.

In this context, the government has called for applications starting July 1 for a subsidy that will benefit 40% of the most vulnerable households in the Social Household Registry, corresponding to 1.5 million households (approximately three million people).

In this regard, the opposition is requesting that aid be extended to middle-class sectors, and that the poorest 40% not have to apply, but rather it be automatic.

This was stated by the RN deputy for Ñuble, Frank Sauerbaum.

“During the pandemic, President Piñera froze electricity rates in order to take a measure to help Chileans cope with the economic stagnation and precarious situation they were in. This rate freeze ends on June 25, and in July there will be a sharp increase of around 20% in the electricity bills of all Chileans. As a result of this, on May 7, the Renovación Nacional bench sent a letter to the Minister of Energy and the government in general, so that the benefit that is going to be established as an electricity subsidy might reach the most deprived sectors, the poorest 40% automatically, as is done, for example, with the water subsidy; and that it might also be granted to the middle class sectors, through an application. The Government has so far refused, saying that the benefit will only be given to the poorest 40% through an application online. “That is ignoring the reality we are living today,” said the legislator.

Sauerbaum stressed that “unfortunately, today, not everyone has access to the Internet, not everyone will be able to apply, and two requirements are required: to be up to date with the electricity bill and to belong to the poorest 40%. We have insisted to the Government that the 120 million dollars that the National Congress approved in Law 21,667 to be able to provide this subsidy have to be for all Chileans, considering the economic situation in which we are living. Today we have 1,200,000 unemployed, 2,600,000 people today live in informality, and therefore, we require that this economic relief that the government is going to provide in a targeted manner, can be extended to the middle class sectors.”

Short Law

Meanwhile, the deputies for Ñuble from the UDI bench, Marta Bravo and Cristóbal Martínez, warned that between next month and January 2025, electricity bills will increase significantly in the region, with the increase being able to reach 31% in the next six months, according to calculations made by different experts in the area. This is equivalent to an average increase of more than $18,000 per household, which will depend on the consumption of each client.

“For those who consume less than 350 kWh per month and whose current bill is $30,000 pesos, with the increase they will pay around $37,600. As for customers with consumption of up to 500 kWh and whose bill is $55,000, the new value will be more than $75,000. While for the last bracket and whose customers currently pay $90,000 pesos, with the new increase their bills would reach almost $117,000,” the legislators stated.

“The estimates we have seen in recent days are absolutely worrying. We are talking regarding a completely excessive increase, which will not only affect vulnerable families, but also the middle class, and even small and medium-sized businesses. And despite all this, we have not seen a response from the current authorities to mitigate this excessive increase that is coming,” criticised Marta Bravo.

For this reason, the parliamentarians called on the Government, but specifically the Minister of Energy, Diego Pardow, to present – as soon as possible – a short law that allows mitigating part of the increase that will begin next month. This, taking into account that the Electricity Tariff Stabilization Law, approved in April of this year, only considered a subsidy for 40% of the most vulnerable families according to the Social Registry of Households, as long as they do not have debts.

In addition, the representatives of Ñuble criticized the fact that during the processing of this initiative, the government did not make reference to the charges for electric transmission, which represent regarding 10% of electricity bills and which will also rise this year, further increasing rates in the country.

“We hope that the government is already working on a new project that will allow it to mitigate the increases projected for this year. With the estimates that exist, it has become clear that the Stabilization Law that the Minister of Energy promoted so much is absolutely insufficient, as we warned him. Much more effective solutions are needed here,” insisted Cristóbal Martínez.