The announcement by President Gustavo Petro to directly assume the management of public service regulation decisions, which is mainly motivated by the prices of energy generation (36% of the value of each kilowatt), not only unleashed a new and strong debate on respect for institutionality as a route to seek efficiencies in user feesbut it again generates a blanket of uncertainty in this economic line.
(Read: Did the minister lie?: The answer is yes and I have proof, says Ruiz).
A situation that, according to sources and spokespersons on the subject consulted by Portafolio, meant that on Friday, without many noticing it due to the hangover of the controversy over gas reserves, the country’s regulatory risk rose to such an extent that the shares of companies with public capital, such as Interconexión Eléctrica SA (ISA) and Grupo Energía Bogotá (GEB), fell more than that of Ecopetrol, which fell after the announcement of the departure of Felipe Bayón in March.
Data from the Colombian Stock Exchange show that the title of GEB, a company that has an alliance with the Enel Group, was the one that fell the most on Friday, by falling 5.63%, accumulating a devaluation of 39.28% in the last year.
The situation was similar for ISA, a transmission company controlled by Ecopetrol, whose action was the second most undervalued of the day, by falling 5.19% for an annual decline of 17.26%, while the Ecopetrol title fell less, returning 3.19%.
(See: Price control?: what is it and why would Petro be proposing it).
“The country’s regulatory risk weighs more, which became the highest in Latin America on Friday and means if I am an investor, I don’t want to put a weight here, but we need foreign investment for the country’s energy transformation,” says one person. Expert in the subject of public services.
And it is that for the sources consulted, this regulatory risk is directly linked to the uncertainty and doubts generated by the lack of technical knowledge of those who will temporarily assume these regulatory functions, because although the Superintendent of Residential Public Services, Dagoberto Quiroga, affirmed that Petro is empowered to resume the functions of the regulation commissions, within this entity no delegate has training and experience in the issue.
“The superintendent today has a problem, and it is that he does not have technical people for these processes and second, Petro wants to assume some functions that he has by right in the head of his Minister of Mines and Energy, Irene Vélez”, says a source in the sector.
And he adds that for Vélez Torres the problems are not minor, because there is a strong internal division in his portfolio, to the point that the unit that could be directly in charge of giving technical light on the adjustments that are neededis headless.
(Also: The law on which Gustavo Petro relies to adjust rates).
This is due to the departure of the Vice Minister of Energy, Belizza Ruiz, to whom Petro finally, after 21 days, accepted the resignation that she presented after being “annulled” by the Minister for any decision to be made.
Alejandro Lucio, an expert in the electricity sector and director of Óptima Consultores, points out that although the electricity sector itself “has shot itself in the foot” by triggering prices in many unjustifiable things and that basically the increases are not due to volatility of energy on the stock market, the reforms must come out of consensus. “Initiatives in social networks in the medium term, for the pandas and improvised, will be paid by the same user or in fees, or in even poorer quality, or even worse, but nothing can be ruled out, because we turn off. The Government should understand that we are on the verge of a blackout”, he alerted.
Commissions will be handcuffed
According to expert sources in public services, while it is defined which of the functions of the regulation commissions are those that are retrogresseddecisions such as the call for an auction of the charge for reliability in the electricity sector, or the auction of the spectrum for 5G cannot be made.
“Since the Lord governs by trills, it is time to wait and see what public instrument, which I suppose will be a decree, comes and brings the powers to see what follows and what does not”, said a person consulted.
ÓMAR G. AHUMADA ROJAS
Portfolio Editor
