In December 2015, the amounts pending payment to the National Institute of Electrification (Inde) for the electricity received by 14 municipalities amounted to Q1 thousand 796.8 million, a sum that rose to Q3 thousand 147.3 million at the end of the year 2023 and to Q3 thousand 186 million as of March 5, 2024, for a total increase of 77.3%.
The figure registered by Inde is made up of Q2 thousand 273.1 million for supply; Q271.9 million value added tax (VAT); Q50.9 million of interest for late payment and Q4.8 million of VAT for this late payment, reaching a subtotal of Q2,600.9 million. To this are added Q585 million of debt recognition from seven EEMs, reaching the indicated total.
Of the 14 EEMs reported by the entity, among those that owe the most is Quetzaltenango, with Q1 thousand 701.3 million. That figure includes, according to the Inde report, the supply until April 2009; the balance from March 2018 to December 2019 for the 8 megawatts included in a contract that dates back to 1978; in addition to the balance of the debt for the megawatts supplied by Inde outside of that contract (to cover all of the municipality’s energy demand), which is the highest amount of the three for Q1 thousand 629.8 million from 2009 to December 2019.
Next in amount is the EEM of Puerto Barrios (Izabal) with Q470 million; the EEM of Zacapa with Q343 million and others with variable balances; Jalapa, Q186.6 million; Gualán (Zacapa), with Q178.2 million; Huehuetenango, with Q120.8 million; and Guastatoya, with Q113.7 million.
The rest of the municipalities have balances ranging from Q2.7 million to Q50.9 million and the EEM of Playa Grande (Ixcán) has a zero balance.
Is it possible to forgive the debt?
About two weeks ago, the representative Faver Emilio Salazar, of the Valor party for the district of Jalapa, presented a bill to approve the forgiveness of the balance of the debt that the EMM owes to Inde as of January 31, 2024 (Q3 thousand 170.8 million).
The parliamentarian declared that he presented the proposal to the Legislative Directorate of Congress, in his personal capacity, supported by several deputies from different benches. This initiative has not yet been read in Plenary, so it does not appear on the website of that Organization. After being read, it must be sent to the corresponding commissions to discuss it and issue an opinion, he added.
Salazar is part of the Municipal Affairs commissions; of Education, Science and Technology; of Tourism and Social Development, he said.
The initiative consists of 7 articles, according to the document provided, and proposes to forgive the debt of the following EMM: Zacapa, Gualán, San Pedro Pinula, Jalapa, Puerto Barrios, Guastatoya, Quetzaltenango, Retalhuleu, San Pedro Sacatepéquez, Huehuetenango, Joyabaj, Santa Eulalia, Playa Grande, San Marcos and Tacaná.
It also proposes the application of a period of 200 days for these companies to proceed to tender and award the purchase of electricity to guarantee the provision of electric energy service in each jurisdiction.
Separately, it sets a period of 150 days for them to present to the National Electric Energy Commission (CNEE) a Plan for Readaptation of the Electric Energy Distribution Network, Transformation Banks and others so that they comply with the provisions of the General Law of Electricity, regulations and other standards to ensure adequate provision of supply in the medium and long term, the document adds.
If approved, the Ministry of Energy and Mines (MEM) would have the power to carry out the necessary procedures with the EEM, the INDE and the CNEE so that article 2, which refers to bidding and awarding the purchase, is fulfilled within a reasonable period of time. of electricity for supply.
Salazar commented that “for EEMs to be competitive and attractive, invest in renewable energies and even attract investments, they need to clean up their finances because they have not been able to be efficient and have already existed for years. After doing so, the municipal administration boards cannot have an excuse for not being good payers of their debts and good administrators of the services they have to provide to the population.”
He clarified that the intention is the forgiveness of the debt, but the purpose should not be confused, since the extinction of the criminal, civil or administrative liability of the municipal electric companies or the people who manage them is not sought.
Analysts: very bad sign
The forgiveness of the debt that has accumulated for several municipal periods would be a bad sign for the communes that do pay and have been regularized, apart from the fact that it would affect the finances of Inde, agreed the independent consultants Carmen Urizar, former energy minister and former president. of the CNEE, and Jorge García Chiu, former vice minister of energy and mines.
They state that it is necessary for the EEMs to be regularized before that Commission and to operate efficiently, tender, acquire and pay for the supply of electricity to cover the demand of their respective jurisdictions, but they insist that they do not agree with the condonation of the accumulated debts.
García Chiu indicates that instead, the EEMs should have tariffs that allow them to cover their costs, “but mayors use the EEMs as petty cash and that might be part of the problem. “The correct thing is that they contract their energy by bidding, in accordance with the General Electricity Law to protect regulated users, guarantee supply and transfer the best prices.”
Regarding Inde’s finances, he explained that the entity has managed to cover its costs, so it needs the income owed to it to maintain its operation and even to plan projects.
He explained that many EEMs already existed before the new General Electricity Law, and they were allowed to remain in force under the criterion that they were going to comply with everything the law says and pay for their energy.
Urizar added that the Institute managed to recover its debt through payment agreements, which is why he insists that it is not appropriate to affect the finances taking into account that the entity manages assets as important as the generation plants and also bears the cost of the social rate.
“The problem is that if the EEMs do not operate efficiently, no matter how much they bid, they do not have interested bidders and Inde has to sell to them.”
When consulted, the president of CNEE, Luis Ortiz, said that he is not aware of the proposed law in question. However, he explained that said Commission issues terms of reference for EEM to carry out its tenders for the purchase of energy, but in the end Inde is the one that ends up supplying them.
In his opinion, that part is already regularized, but “from a regulatory point of view, the companies were regularized, their tariff schedules were approved by the Commission and they operate as distribution companies in their concession areas,” he said.
Alcaldes
Although Prensa Libre sought the opinions or positions of several EEMs, including Quetzaltenango, no response was obtained. However, Sebastián Siero, president of the National Association of Municipalities (ANAM), responded in writing (via Whatsapp) that the EMMs were promoted by Inde because it might not charge for the service. “He only transferred the problem to the municipalities, without attacking the underlying problem.”
He also considers that the debts have been generated by poor administrations of Inde and the municipalities, so “the correct thing is to forgive the debt, but implement measures to prevent it from accumulating once more.”
The position of the Inde
Inde was asked some questions regarding the debts and the proposed forgiveness and these were its responses:
Is Inde in a position to forgive the debts owed to the EEM?
The National Electrification Institute (Inde) is an autonomous and decentralized institution that enjoys autonomy and its own assets. INDE’s income is allocated to the construction, maintenance and operation of its hydroelectric plants, transmission lines, contribution to the Social Rate and especially to the rural electrification of the country, the purpose of which has been oriented since its creation.
Inde operates through all income from the electrical activity it carries out, to be used exclusively to fulfill its purposes and promote the financial sustainability of the Institution.
Inde is an open-door institution and is in charge of dialogue and thus learn regarding other options that benefit the Institution and the Administration of the Municipal Electric Companies and their users.
The need for EEMs to regularize and put out to tender the supply they require is also proposed. What does Inde think?
It is important that the EEMs comply with the regulatory framework of the electrical subsector and in that sense, in accordance with the General Electricity Law, they must promote bidding events for the supply of power and energy. An EEM that complies with this is considered commercially regularized.
Currently, 12 of the 14 Municipal Electric Companies served by Inde have a current contract from a bidding event held in accordance with article 53 of the General Electricity Law.
Inde has always demonstrated flexibility so that EEMs can pay their debts with payment commitments. In addition, it can provide them with technical advice to improve their technical, commercial and administrative performance, in order to make them financially sustainable in the long term.
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