Complicated start with the tariffs: companies and provinces have not yet received instructions

The government will try to launch an increase in tariffs for electricity and gas services this Thursday amid rumors of a possible delay. Ten days after the announcements, the authorities ran into it several difficulties in implementing the removal of subsidies and comply with the new tariffs, with increases that according to some private estimates could reach up to 400% per year.

On the eve of these changes, Massa appointed the Buenos Aires Ombudsman Walter Martello this Sunday as controller of the National Electricity Regulatory Body (ENRE), in charge of monitoring the service. Hammer questioned on Twitter “the poor performance of the service and the financial statements of the electricity companies “. Martello, former Ombudsman of Buenos Aires, replies to Massa.

As for the tariffs, the distributors of both services in the AMBA ensure this They haven’t received the rate charts or the list of people yet that will no longer have subsidies for segmentation. In this context, companies, which have to design the new billing scheme, are preparing for a complex week, marked by the great demand of the public waiting in the offices due to lack of information.

With Sergio Massa’s arrival at the Ministry of Economy, the Government has defined limits on energy consumption to maintain subsidies. Therefore, families who exceed this ceiling will pay the full rate for the surplus. In gas it will be divided by regions and customer classes, while in electricity the total price will be charged for consumption above 400 kWh and that for the northeastern provinces of Argentina, Catamarca and La Rioja would be 550 kWh.

The Secretary of Energy in turn, it needs to cross-reference data with distributors and provinces determine who will be the beneficiary of the social tariff, which corresponds to low-income families. “We are working to finish receiving data from distributors to obtain the number of people who have a social tariff”, they said from the energy area, where they assured that, however, this will not prevent the removal of the subsidies applied.

As for the provinces, Energy plans to complete information on the two or three remaining provinces this Monday. According to the authorities, 9 million people signed up to keep subsidies and another 4 million did not. Within this group it is estimated that, in addition to high-income people, there are beneficiaries of the social rate who have not been able to register. If the provinces do not present them, only those registered in the form will be entered.

This number of unregistered people generates fear in the provinces, where it would represent about 40% of families. The governors complain that the national government has not shared the database with them and that in several cases they do not receive funds to cover the social rate, since during the administration of Macri the provincial coffers have started to cover it. Instead, they claim that the delays are due to management changes in Economy and servers.

The Secretary of Energy, Flavia Royón, sent resolution 627 to the provinces last Thursday with the seasonal prices of the wholesale electricity market from 1 September to 31 October 2022 for distributors and suppliers. The charts predict wholesale increases of up to 66% starting Thursday for large users, government agencies, businesses and households. But the resolution has not yet been formalized.

Mass made changes to the subsidy segmentation designed by Martín Guzmán and initiated by Silvina Batakis. It encompassed consumption caps and incorporated business and water services into the stub of subsidies, along with a broader universe of full-rate utilities. The minister continued on this path in the face of difficulties in reaching the deficit target of 2.5% with the IMF, which requires a saving of 500,000 million dollars in the year.

“Under an expected scenario, if the current level of energy prices is sustained, the tax savings resulting from the set of tariff policies will be around $ 195 billion in 2022, which represents a 0.25% reduction in the weight. of subsidies. Therefore, total energy subsidies on GDP would be about 1.95%, higher than the target agreed with the IMF (1.6% of GDP) “, reads a report by the Cifra research center. .

On the eve of these changes, Massa appointed the Buenos Aires ombudsman Walter Martello as the auditor of the National Electricity Regulatory Body (ENRE), in charge of monitoring the service. Martello questioned on Twitter “the poor performance of the service and the balance sheets of the electricity companies”.

“We will not hesitate to go to court if the situation demands it. Businesses must understand that it is not possible to switch to first world rates with third world services,” warned María Soledad Manín’s deputy, an official. linked to Federico Basualdo, who led the Kirchnerist resistance against Guzmán in Energy and was eventually replaced by Massa.