In recent weeks President Gustavo Petro has referred several times to the formula that establishes the price of electricity for households, while raising the need to make adjustments to lower prices, especially in regions such as the coast.
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“We have to Rethink this formula (of energy) and the current regulation to prevent these companies from setting prices that go against the pockets of Colombianss. And in this government we have tried, but we have found obstacles”said President Petro during his speech last Sunday.
However, experts warn that The Government could reduce the rate for the lowest strata by up to 20% if it assumes the tariff option debt of users, as the president indicated at the beginning of May.
During Sunday’s speech, the president said that despite the obstacles, they will continue to try to make changes. He also noted that “CColombia is the only country in Latin America where the cost of energy is not regulated by the State. Companies can set the price of energy according to the market, which allows them to speculate”.
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This statement was not well received by actors in the sector, such as Alejandro Lucio, director of Óptima Consultores, who said thatstaaThe president’s signature was “ridiculous” since each of the components is regulated by the Energy and Gas Regulatory Commission (Creg).
Precisely, one topic that draws attention is the fact that This entity has lasted for months without a quorum to hold sessions since the president did not make any permanent appointments until last November 2023, when he made a designation that was subsequently declared void by the Council of State.
Only after the High Court ordered the appointment of all the expert property commissioners, the Government made three appointments in this capacity, completing the decision-making quorum with an appointment from Orlando Velandia.
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Lucio explained that “The statement that on the Coast the user pays the cost of imported gas in the generation component is not accurate”. He added that eThe price of generation is given by two mechanisms: contracts and energy exchangewhich can be 70% and 30% respectively.
“The stock market price in drought events, in effect, approaches the marginal cost of gas, but in events of hydrological abundance it is substantially lower than the price of long-term contracts.“, he said.
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Hydroituango
Courtesy of EPM
However, this is only one of the six components of the electricity bill and whose price is determined by market factors, such as scarcity. According to Lucio, it is also necessary to take into account that the other points can weigh between 40% and 50% of the final price paid by users.
Such is the case of the transmission, distribution, marketing, losses and restrictions, whose remuneration is completely defined by means of a formula tariff that is updated every five years.
José Camilo Manzur, president of Asocodis, highlighted the importance of the Government manage the payment of the tariff option debt of the lowest stratawhich, added to the actions that companies have taken, would contribute significantly to a drop in price.
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Changes and proposals
The The escalation in the price of kilowatt hours after the pandemic led the Government to generate several initiativess, some of which have already borne fruit. Such is the case of the Pact for Tariff Justice through which generation companies gave discounts on bilateral energy contracts to marketing companies.
In additionrecently three companies announced reductions in the contracts with which they serve the Caribbean markets and which will have an effect on bills. These are AES, EPM and Celsia, as well as others who said they were studying the discounts they would make.
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Energy bill
THE TIME file
However, One of the biggest impacts would be generated if the government actually assumed the tariff option debt of strata 1, 2 and 3, which could reduce the kilowatt hour paid by users in this region by up to 20%.
This requires the Government to present a Bill before Congress, through which the conditions for capitalizing this amount are established; however, this has not been presented so far.
The same waythe Creg presented a draft resolution through which new indexers for the components are proposed and thus prevent rates from escalating at the rate they did after the pandemic. The proposal, which is in the comments stage,could also generate positive effects by controlling monthly variations of these parts of the tariff.
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“The pConcerns about the behavior of agents in the energy market are legitimate; however, in order to reach effective solutionsmust start with a careful understanding and analysis, far from discourse“Lucio said.
He also drew attention to the need for generation to grow in order to meet demand, since pressure between supply and demand affects prices.
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