The post The tariff option mess appeared first on Minuto30.
Since 2022, not only in Colombia but in the rest of the world, energy prices and rates have skyrocketed, due to a global inflationary outbreak in which the energy service has taken the brunt. However, the increase affects users in the Caribbean region more because their rates are higher. While in the rest of the country rates range around $850 per KWH, in the Caribbean region they exceed $1,200 per KWH.
The energy rate (Unit cost) has 6 components, namely CU = G + T + C + D + PR + R. What makes the difference between the rate in the Caribbean region, Market served by Air-e and AFINIA, with respect to the rest of the country is the charge corresponding to recognized losses (PR). While in the rest of the country this charge is on average 8.5% in the Caribbean region it is 24%, given that not only technical losses are recognized but also non-technical losses, that is, the energy that is stolen, in such a way that we end up paying the just for the sinners. This can only be explained by the “special regime” for the Caribbean provided for in Law 1955 of 2019 of the PND of the Duque administration. Although this charge is legal, because it is based on Resolution 010 of 2020 of the CREG, it is still unfair.
Opinion
One factor that had been contributing to high rates throughout the country was the application of a Producer Price Index (PPI), which did not at all take into account the costs incurred by agents in the chain, to several of the charges in the rate. Fortunately, its calculation was reconsidered and the CREG will have to modify it and establish a more appropriate deflator.
Another issue included in the tariff formula is the charge for restrictions (R), attributed especially to the delay in the execution of generation and transmission projects, which since 2000 has been charged 100% to users, when, instead, those who should assume them are those responsible for them. But this is what CREG established through Resolution 063.
The tariff option (OT) deserves a special mention. At the end of 2022, in the Pact for “Tariff Justice” announced by the former Minister of Mines and Energy Irene Vélez, it was agreed to temporarily suspend the collection and payment of the OT. When its collection resumed in January 2024, the OT became charge 7 of the tariff formula (CU = G + T + C + D + PR + R + OT), exacerbating tariff increases.
After three unsuccessful summits (the first in the Nariño Palace, the second in Sincelejo and the third in Cartagena), without reaching agreements to lower rates, President Petro announced from Barranquilla that the National Government would assume the payment of the Tariff Option, which would translate into a reduction of between 4% and 20%, depending on the case, in the bill. Shortly after, the Minister of Mines and Energy Andrés Camacho clarified that only the debt for the OT of users of strata 1, 2 and 3 ($2.8 billion) would be assumed. And, to top it off, he argued that the Nation could only assume said debt if the Congress of the Republic empowers the Government to do so through a Law, which will be processed in this legislature that is just beginning.
Meanwhile, the Minister of Mines and Energy, Andrés Camacho, issued Resolution 40225 on July 2, ordering the Commission for the Regulation of Energy and Gas (CREG) to adopt “measures to reduce rates for regulated users of the electric power service.” However, the CREG, due to lack of quorum, is not in a position to make decisions. 25 of the 30 calendar days given by the Minister to lower rates have already passed and so far, nothing at all!
And speaking of solutions, for which we have presented concrete and reasonable proposals, in addition to the review of the charge for recognized losses (PR) and the indexer (IPP) and the elimination of the charge for restrictions (R), in addition to the payment of the Tariff Option by the National Government to the companies, the generating companies should make an effort in this critical situation for the users, by arranging a temporary discount on the price of energy agreed in the bilateral contracts between them and the distribution companies, thus reducing the charge for generation (G). For their part, the distributors must make a greater effort to reduce their exposure in the Stock Market, in order to mitigate the impact of the spot price on the G component of the tariff (CU) and reduce the charge for marketing (C).
Finally, we would like to say that, as we have pointed out, in order to ease the burden on users by reducing the cost of the energy bill, there are several actions that can be undertaken now, and they include overcoming the CREG impasse, which has become the Gordian knot of the current crisis. We do not have to wait for the reform of the Public Services Law to achieve this, as has been subtly proposed. Those who support this thesis, such as the Minister of Mines and Energy and the Superintendent of Services, Dagoberto Quiroga, are trying to create a smokescreen, while trying to push through the announced reform project. This is nothing more than a fallacy and a mirage at the same time!
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The post The tariff option mess appeared first on Minuto30.
2024-07-30 02:32:15
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