Government will subsidize more to adjust 9% to electricity rate

Government will subsidize more to adjust 9% to electricity rate

The Superintendency of Electricity (SIE) increased 10.4% to the electricity rate for residential customers in general, however, the reality, given international fuel prices, is that it should have been 26.6%, explained the entity.

In order not to reach that percentage, the government will allocate 510.7 million pesos each month above the subsidy for electricity rate that he would allocate between April and June. What the calculations dictate is that there were 1,683.5 million pesos per month in subsidy to the clients of the electricity distribution companies (EDE), in the current quarter, but now it will be 2,194.2 million pesos per month on average.

The increase in the subsidy occurs when the objective is to gradually dismantle said government contribution by the year 2026. Only between 2003 and 2020, the State allocated 174,000 million pesos in expenses for the national electricity sector, reported the SIE.

In order to progressively eliminate the subsidy, since November of last year the SIE has adjusted upwards, through a resolution, the electricity rate that will govern per kilowatt hour (kWh) for each type of customer.

For the current quarter, it established a 9% adjustment to the rate per kWh, in relation to the one set in January-March, for residential customers of the electricity distribution companies of the North (Edenorte), the South (Edesur) and the East (Edeeste), with a consumption of 0 to 300 kWh per month. Residential clients represent 98% of EDE clients, according to the SIE.

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The adjustment applied was due “to the current and widespread volatility in the international prices of mineral coal, natural gas, oil and derived fuels used for electricity generation,” said the SIE.

The ton of coal alone went from 162.84 dollars in October 2021 to 219.33 dollars the following month, but then fell to 139.61 dollars in December, according to figures given by the SIE as a reference for the new adjustments.

Specifically, when calculating the costs and the formula used by the technicians to establish the electricity rate, a residential customer who paid 1,243.88 pesos per month for 200 kWh of consumption, should pay 1,659.74 pesos, for a variation of 33.4%. When the government assumes the differential, the adjustment of this range will only be 7.8% and the client will only pay 1,340.41 pesos.

On average, the SIE indicates that the adjustment of the electricity rate it should have been, in general, 20.9%, and particularly for residential customers, 26.6%. Instead, 14% was applied, in general, and 10.4% for residential, since all the ranges of their consumption in kWh were included.

If it is distributed by distribution company, Edenorte’s clients (1.1 million), would be the ones that should have had the greatest percentage variation.

“We are talking about the fact that practically 80 percent of the population has benefited from not transferring 100 percent of the corresponding adjustment,” said the SIE.

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“Like everything else, at a global level, we are going through a crisis due to this situation in Ukraine (war with Russia), but, when that normalizes, the rate will return to its normal level and we will come with more normal adjustments for our market: 1 percent, 2 percent, maybe,” said engineer César Olivero, from the SIE, on a visit to Free Journal.

The SIE did not say whether the adjustment for the July-September quarter will be greater, given the continuing volatility in international fuel prices, or whether the government will again subsidize an amount greater than estimated.

Economics editor and professor of journalism. She has specialized in investigative, multimedia and data journalism.

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