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Another increase in electricity?: The Government analyzes another 100% increase for the May-July quarter - Infobae
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¿Otro aumento de la luz?: el Gobierno analiza otra suba del 100% para el trimestre mayo-julio
Así surge de la última programación estacional provisoria de Cammesa. El impacto en las facturas será del 50% para los sectores de altos ingresos que, al igual que las industrias y los comercios, no perciben subsidios. Puede aumentar el gasto en subsidios
www.infobae.com
March 12, 2024
This emerges from Cammesa's latest provisional seasonal programming. The impact on bills will be 50% for high-income sectors that, like industries and businesses, do not receive subsidies. Subsidy spending may increase
By Agustin Maza
The increases in energy rates have not yet ended and the application of the new subsidy scheme is still pending (Illustrative image Infobae)
Residential users classified as high-income, businesses, industries, public buildings and universities , among others, could soon receive a new increase in their electricity bills that will be added to the one applied in February. Thus, this group will pay 100% more only for the concept of the cost of electricity in their final bills for the May-July quarter. The transfer to the middle and low income segments could be a strong blow to the pockets but not doing so implies greater spending on subsidies that will undermine the Government's fiscal balance goal.
This is clear from the latest provisional seasonal programming for the cost of energy published on Friday by the Administrative Company of the Wholesale Electricity Market (Cammesa) for the period May-July 2024. The projection of the cost of the entire system is usually carried out there. national electricity purchased by distributors and large users in Argentina.
This programming does not imply an automatic impact on the bills, since it is the Secretary of Energy of Eduardo Rodríguez Chirillo that must define how much the demand will pay on that cost. This item represents about 40% of the final electricity bills, while those for transportation, distribution and taxes are added .
In detail, Cammesa predicts that the cost of electrical energy will grow around 100% for the May-October 2024 semester. It is worth clarifying that an average exchange rate of $1,200 was taken, but because the exchange rate contemplated by the market was taken of dollar futures and is not necessarily an official projection.
Cammesa, provisional seasonal programming (Cammesa)
Currently, not all users pay the same for the cost of energy in their bills, which is where the subsidies are granted. The current subsidy scheme marks three universes: high income (N1), low income (N2) and medium income (N3) determined by the Total Basic Basket (CBT) of Indec .
In the case of N1s, they pay the full cost of electricity and, therefore, do not receive subsidies. According to the calculations of economist Julián Rojo , a home in that segment will have an increase in the price of energy of 115% compared to April, 290% compared to February and 340% compared to January 2024. For that reason alone, he estimated, The final bill will increase by 50% from May.
But the data that draws the most attention is what will happen to the N2 and N3 who represent close to 7 out of 10 users but pay less than 9% of the cost of electricity in their bills. With Cammesa's new projection, that coverage will be reduced to 3% and 4%, respectively.
That would imply greater government spending to subsidize the difference between what these users pay and the cost of electricity. However, starting to pay for energy without subsidies would open the door to increases of around 1,200% according to Rojo's calculations.
Increases for middle-income users that arrived in March (Economy and Energy)
One of the keys will be the application of the new subsidy scheme prepared by the Ministry of Energy. The original idea is that all users pay the “real cost” of energy and that subsidies are granted directly to the demand whose income destined to pay for these services does not represent a certain percentage of a Basic Energy Basket (CBE) that will include the type of consumption according to each bioclimatic zone of the country. Although the application is not yet 100% defined.
Residential users received the February bills, which arrived in March, with the increase corresponding to the 118% increase in the post-devaluation energy cost only for the N1 and the distribution cost for all users, for all categories that They will now be divided into four levels.
The consulting firm Economía & Energía published in its latest monthly report an estimate of the magnitude of increases that each type of user will receive based on their level of consumption and the population segment in which they are located.
“Average monthly bills increase 183% for high-income residential users (from $10,467 to $29,637), while for low-income users it is 185% ($3,970 to $11,313) and for middle-income users it is 177% ( $5,518 to $15,260)”, highlighted Economy and Energy. Industrial and commercial users had received increases in February that in some cases exceeded 300 percent.
Given the measures defined by the Ministry of Energy, monthly updates in the distribution cost starting in April and the new criteria for assigning subsidies will be added to these increases.
The north of the Government continues to focus on the need to cut spending on subsidies. By 2023, the volume of these expenditures reached 2.1% of the Gross Domestic Product (GDP), with the energy sector contributing 1.6 percentage points, which represents approximately 9,683 million dollars, according to estimates made by the International Monetary Fund (IMF) and the consulting firm Economía & Energía . The objective has been set for 2024 to reduce these subsidies to 1.3% of GDP in general terms, and to 1.1% specifically in the energy field.
