With indifference towards the administration that carries it out energy populism that prevails in most of the 21st century has common characteristics. Perhaps the most relevant is the state of energy emergency permanent and in effect for 20 of the last 23 years.
This situation has consequences concrete.
THE First THE institutional interventionwhich comes not only to the unjustifiable intervention of the Supervisory Bodies, but also of the ignorance of contracts and regulations that frame the functioning of the sector. This implies an environment of uncertainty and discretion which limits any long-term investment process.
THE second consequence: the Speed lag/freeze. The permanent decoupling of prices and costs is covered with subsidies applied for in the last 15 years a average of 13,000 million dollars a year And they accelerate at the rate of inflation.
In turn, the freeze breaks the logical relationship between tariffs, quality of service and investments, and this places companies as “scapegoats” to whom blame for a wrong tariff policy is blamed and where the intervention (or the installation of supervisors ) by the state will not solve the problem. Today we find the example of Edesur, yesterday it was Metrogas in 2010 and TGN in 2008, examples of failed interventions in public utility companies.
This ruinous tariff recipe has generated the fiscal problem which is at the heart of the public debate and the agreement with the IMF, to the point that the reduction of energy subsidies, in particular to CAMMESA, explains 80% of the fiscal adjustment expected in 2023.
2022 ended with an energy subsidy of $12.5 billion, however, this number does not reflect debts within the payment chain which would sooner or later end up adding to the transfer account to the energy sector. This is what the Chief of Cabinet of Ministers reported in his last visit to the nation’s Senate.
More than 600,000 million dollars represent the debt of electricity distributors with CAMMESA for the energy sold at the end of 2022 And while compounding a long-term payment plan reduces that number, the underlying problem remains: rates do not cover costs and it is difficult for distributors to stop borrowing for energy sold.
In turn, CAMMESA maintains debts with generators and for the purchase of fuel which, although JGM has not informed, has on the other hand that more than 30% of the generating park is out of service. Whether due to maintenance or lack of fuel, the system is unable to cover the summer consumption peaks with its own generation and is increasingly dependent on imports. The alternative is scheduled outages like the one on February 10 that left more than 180,000 users without electricity.
Added to this are debts of gas distributors to producers for 75,000 million dollars and debts for compensation relating to the Gas Plan, which exceed 50,000 million dollars as a result of the fact that since January 2021 the National State has held almost 50 % of such payment assignments. .
But freezing rates has other implications and costs. The income not received by the service companies constitutes an asset which, in return, represents a potential liability for the National State, which not only violated the original contracts, but also ignored the agreements reached in 2018 and must therefore renegotiate and define the entity of said liability or “regulatory asset” of companies.
The next administration faces the enormous challenge of retracing the path of energy populism, which includes the institutional normalization of the sector, the recomposition of the price and tariff system, but also the exposure of debts and contingencies that are now trying to hide .
Source: Clarin
