The government of the province of Buenos Airesled by Axel Kicillof, solved this Friday the transfer into rates of the increase in the wholesale price of energy and elimination of subsidies defined by the Nation’s Ministry of Energy.
In a statement, the Ministry of Infrastructure provincial, responsible Gabriel Katopodisindicated that “the energy increase affects high-income residential users and middle-income users who consume more than 400 kilowatt hours (kWh) per month, in a 118%“.
“In the extreme case of small businesses -who are those who consume less than 800 kWh per month-, the increase reaches 413%. There is also an increase for public organizations in the Education and Healthcare portfolios, which will see an increase of 186%,” Infrastructure said.
Likewise, he underlined that “the defined increase will be reflected in the February consumption of Buenos Aires users, as it will be transferred to the provincial tariff tables.” All this is a consequence of the removal of national subsidies to reduce public spending.
Rates, subsidies and debt in Buenos Aires
He also referred to the situation in the electricity sector and in this sense recalled that “in the context of the pandemic and the consequent crisis, rates remained well below cost increases“.
“To sustain supply, provincial distributors and cooperatives had the support of the provincial state – through subsidies – and the previous administration of the national government, which granted credits, payment plans and concessions to deal with the growing debt situation in payment of energy, since the partial payment of invoices to the Wholesale Electricity Market Management Company (Cammesa) allowed them to cover a large part of their costs”, highlighted the provincial portfolio.
The group includes the companies that provide the service within the province of Buenos Aires Energy Developer (DESA) and they are Edelap, Eden, Edes and Edea.
On the other hand, the Katopodis team underlined that “the current scenario on the part of distributors and cooperatives is one of high level of debt“, and specified that “in the case of the cooperative sector a higher level of severity is evident”.
He indicated that “although it is a very heterogeneous sector, it is observed that in many cases they would not be able to pay their salaries if they paid 100% of the energy purchased.”
“In this context, the national government has ordered suppliers to recover this debt. For this reason, in addition to the increase in the cost of energy, An increase in one of the components of the rate will soon be added: the Added Value of Distribution (VAD) which will serve to pay off the debt with Cammesa and guarantee the operation of the service. By adding both, the rate will undergo an average increase of 180%.“warned the Ministry.
For this reason, he underlined that “in this situation of increase in wholesale energy costs and payment of the debt with Cammesa, the objective is to rebuild the operating income of the distributors, guarantee the payment of the current bill of the Energy Management Company Wholesale Electricity Market and perform maintenance and investments on the network to guarantee the service”.
The next one increases
“With the removal of subsidies, the increase in wholesale energy costs and the increase in VAD, the average increase in electricity bills will be 180%. A high-income residential user (N1) consuming 150 kWh month will go from paying an average of $8,600 per month to paying $24,000,” Infrastructure explained.
He added that “in the case of low-income N2 users, if you paid $3,500 a month using 150 kWh in January, would you pay $10,500 in March?”, and noted that “these increases are similar to those recently applied to invoices of Buenos Aires residents living in the AMBA, concession areas of Edenor and Edesur, both distributors under national jurisdiction.
Source: Clarin
