The government has given up on the idea of order electricity and gas tariffs until the end of his mandate. The provision of these services includes comprehensive rate reviews (RTI is the technical name) on an annual or half-yearly basis, according to the legislation that regulates them. Alberto Fernández’s administration suspended these procedures as soon as his administration began in December 2019 and will not regularize them for at least a year.
Though the abolition of subsidies will continue (through segmentation) and increases in electricity and gas bills for 2023, will be “transition rate adjustments”. This will achieve four years of non-compliance with the state’s obligation to conduct comprehensive rate reviews.
In the 2023 budget, voted by Congress, it was indicated that the electricity distributors of Buenos Aires would carry out a “comprehensive tariff review” which it was to take place three months after the enactment of the law. The executive branch appears set to violate that article.
The Budget Law also provides for regularization of distributors’ debts with Cammesa, through a disbursement plan. Edenor and Edesur owe more than 200,000 million dollars to that system wholesaler. edenor It changed ownership during this administration: Marcelo Mindlin sold control, which was acquired by José Luis Manzano and Daniel Vila, two businessmen friends of the Minister of Economy. The Italian Enel has put up the for sale sign Edesur.
On Wednesday, a decree extended a previous one, from 2020. As part of the “economic emergency”, the Government had suspended the application of the “overall tariff review” for 180 days. It was subsequently extended and a two-year period was established to regularize the tariff frameworks. Progress was to be made in “interim reviews” until a more general order was achieved. But the executive has extended the transitional decrees for another year.
But the Executive has postponed the idea of regularizing, delegating the task to the next administration. It is something of a repeat of what happened when Cristina Fernández de Kirchner left power in December 2015 and Mauricio Macri took office. Now, Alberto Fernández transfers the responsibility of ordaining the next head of the Executive Power, be it of his political space (the Frente de Todos) or of the opposition.
Every time the organic tariff revision is not respected, the electricity and gas distributors say they have losses, because they are unable to rebuild their income at the rate of costs, which grow due to inflation, parities, supplies they need and their suppliers. The price that distributors pay for the electricity and gas they bring to homes and businesses is subsidized by the national state.
From the end of 2001, after the declaration of the economic emergency, the Executive suspended the application of the regulatory frameworks in the electricity and gas services. This was the case during the government of Eduardo Duhalde and the twelve years of administration of Néstor Kirchner and Cristina Fernández de Kirchner. The Mauricio Macri administration, in 2016, once again sought the legal system in the implementation of tariffs in public services. However, spooked by poor elections in the 2019 presidential primaries, Macri also suspended the RTI application in the second half of 2019.
The measure also extends the intervention of regulatory bodies. At the head of it are mayors appointed by political will. Currently they are Walter Martello of Enre (regulates the concessions in Buenos Aires) and Osvaldo Pitrau of Enargas (responsible for gas concessions throughout the national territory). During the Macri administration, there were contests to elect the presidents of those bodies.
Since the arrival of Sergio Massa at the Ministry of the Economy, some measures have begun to reduce subsidies: a segmentation of the rates has been applied, so that high-income families (or those who do not want subsidies) pay the total cost of electricity they consume
A public hearing was also held to charge back customers a greater part of the cost of gas, currently subsidized at 67%. Although the Government has not yet defined itself in this regard, in the event that subsidies decrease, families will have to face increases of 50% for the cost of gas alone.
Source: Clarin
