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Electricity will increase more than 100% but only for households that do not receive subsidies - Infobae
Source:
February 05, 2024
The increase will be from February 1st to April 30th. Levels N2 and N3, low and middle income, will have a freeze during the quarter
By Agustín Maza
The rule also extends the obligation for electricity distributors to include the item “National State Subsidy” and the subsidized amount on the invoice.
The Government has provided that high-income families or those who gave up energy subsidies will have an increase of around 118% in the price they pay for the cost of electricity on their bills between February 1 and 30. of April. However, it left the values of low- and middle-income users unchanged—categorized as N2 and N3, respectively—in an effort to ensure that this universe does not suffer a “sudden impact” on what they pay for the service. The official objective, in line with the spending cut plans agreed with the IMF , is to reduce spending on subsidies .
Through Resolution 7 of 2024 , published this Monday in the Official Gazette, the Ministry of Energy established for each of the months of the quarter between February 1, 2024 and April 30, 2024 the application of the new Power Reference Prices (POTREF) and the Stabilized Price of Electrical Energy (PEE) in the MEM of the subsequent table. The PEE together with the POTREF and the Stabilized Price of Transportation (PET) are the ones that must be used for their corresponding application in the tariff tables of the Distribution Agents and other Public Distribution Service Providers that require it.
In effect, the change is an extension of the rate freeze for low-income users and partially subsidized middle-income households for three more months. For the rest, the N1 level which is estimated to be around 30% of users, the increases will imply that at the end of the quarter the cost of the tickets will be double the current one.
Economist Julian Rojo specified that the increase is 118% compared to January, which basically reflects the effect of the last devaluation , and 80% if the previous resolution that had set provisional values for generation is taken into account. This concept explains around 48% of the final price of the bills received by residential users in the Buenos Aires Metropolitan Area (AMBA) .
The increase is different in peak, off-peak and other hours, but slightly exceeds 100% in general (Illustrative image Infobae)
In the case of N3 users, middle-income users, the subsidy maintains the limit of 400kWh/h of monthly consumption. Above that level of use they will pay the full rate, with the same increases that apply for level N1. And it is mandatory for electricity distributors to include the item “National State Subsidy” and the subsidized amount on the invoice.
On the other hand, Rojo highlighted that two out of every three AMBA users pay between 7% and 8% of the cost of electricity , “the lowest coverage in history.” Within the current segmentation scheme, this universe covers the N2 (lowest income) and N3 (medium income), while the N1 (high income) now pay full payment again. “To eliminate subsidies, the price of energy must be multiplied by 15 and 12 times for 70% of households throughout the country. The impact on each province depends on its own tariff structure ,” explained the specialist.
During the next few hours, the National Electricity Regulatory Entity (ENRE) will issue two resolutions to transfer this increase in the wholesale price of energy to the Edenor and Edesur bills . The control bodies of the rest of the companies must also do so.
During the weekend, the Ministry of Energy had anticipated that it would update the value of electricity only for high-income users with the aim of beginning to "clean up the electrical system." In any case, they focused on avoiding the effect on the most vulnerable segments: “To avoid sudden impacts on the costs of the service for low- and middle-income users, subsidized seasonal prices will be maintained in these segments, until the "the new subsidy system is in force that will consider the payment capacity of each consumer."
“The objective of these measures is to establish mechanisms that balance prices, services, investments and quality of distribution; and progressively correct the imbalances generated by 20 years of subsidies, which generated a deficit for the National State of USD 104,764,808,732,” concluded the agency led by Eduardo Rodríguez Chirillo.
Soon, the National Electricity Regulatory Entity (ENRE) will proceed to issue two regulations intended to reflect the increase in the wholesale price of energy in the bills of Edenor and Edesur services, a measure that must be replicated by the entities. regulators of other service companies.
By 2023, the volume of economic subsidies 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.
IMF experts, in the Staff Report , suggested that starting in February, tariff increases of more than 200% in electricity and 150% in gas should be implemented. However, the Government opts for a position of exaggerated prudence, deciding to postpone any rate increase until after holding a new public hearing to establish the validity of the “Basic Energy Basket”, affecting 70% of the population whose income They do not exceed 3.5 basic baskets.
With an eye on April, it is planned to introduce a new scheme that will replace the current segmentation, focusing subsidies on those households whose energy expenditure exceeds 10% of their income. In this way, state support would focus on the amount that exceeds said percentage, in order to alleviate the financial burden on consumers.
Source:
February 05, 2024
The increase will be from February 1st to April 30th. Levels N2 and N3, low and middle income, will have a freeze during the quarter
By Agustín Maza
The rule also extends the obligation for electricity distributors to include the item “National State Subsidy” and the subsidized amount on the invoice.
The Government has provided that high-income families or those who gave up energy subsidies will have an increase of around 118% in the price they pay for the cost of electricity on their bills between February 1 and 30. of April. However, it left the values of low- and middle-income users unchanged—categorized as N2 and N3, respectively—in an effort to ensure that this universe does not suffer a “sudden impact” on what they pay for the service. The official objective, in line with the spending cut plans agreed with the IMF , is to reduce spending on subsidies .
Through Resolution 7 of 2024 , published this Monday in the Official Gazette, the Ministry of Energy established for each of the months of the quarter between February 1, 2024 and April 30, 2024 the application of the new Power Reference Prices (POTREF) and the Stabilized Price of Electrical Energy (PEE) in the MEM of the subsequent table. The PEE together with the POTREF and the Stabilized Price of Transportation (PET) are the ones that must be used for their corresponding application in the tariff tables of the Distribution Agents and other Public Distribution Service Providers that require it.
In effect, the change is an extension of the rate freeze for low-income users and partially subsidized middle-income households for three more months. For the rest, the N1 level which is estimated to be around 30% of users, the increases will imply that at the end of the quarter the cost of the tickets will be double the current one.
Economist Julian Rojo specified that the increase is 118% compared to January, which basically reflects the effect of the last devaluation , and 80% if the previous resolution that had set provisional values for generation is taken into account. This concept explains around 48% of the final price of the bills received by residential users in the Buenos Aires Metropolitan Area (AMBA) .
The increase is different in peak, off-peak and other hours, but slightly exceeds 100% in general (Illustrative image Infobae)
In the case of N3 users, middle-income users, the subsidy maintains the limit of 400kWh/h of monthly consumption. Above that level of use they will pay the full rate, with the same increases that apply for level N1. And it is mandatory for electricity distributors to include the item “National State Subsidy” and the subsidized amount on the invoice.
On the other hand, Rojo highlighted that two out of every three AMBA users pay between 7% and 8% of the cost of electricity , “the lowest coverage in history.” Within the current segmentation scheme, this universe covers the N2 (lowest income) and N3 (medium income), while the N1 (high income) now pay full payment again. “To eliminate subsidies, the price of energy must be multiplied by 15 and 12 times for 70% of households throughout the country. The impact on each province depends on its own tariff structure ,” explained the specialist.
During the next few hours, the National Electricity Regulatory Entity (ENRE) will issue two resolutions to transfer this increase in the wholesale price of energy to the Edenor and Edesur bills . The control bodies of the rest of the companies must also do so.
During the weekend, the Ministry of Energy had anticipated that it would update the value of electricity only for high-income users with the aim of beginning to "clean up the electrical system." In any case, they focused on avoiding the effect on the most vulnerable segments: “To avoid sudden impacts on the costs of the service for low- and middle-income users, subsidized seasonal prices will be maintained in these segments, until the "the new subsidy system is in force that will consider the payment capacity of each consumer."
“The objective of these measures is to establish mechanisms that balance prices, services, investments and quality of distribution; and progressively correct the imbalances generated by 20 years of subsidies, which generated a deficit for the National State of USD 104,764,808,732,” concluded the agency led by Eduardo Rodríguez Chirillo.
Energy subsidies
Throughout the nation, seasonal energy costs remain uniform, with the sole exception of the province of Tierra del Fuego, which is not part of the Argentine Interconnection System (SADI). This implies that the benefit of the subsidy extends to all those users who do not cover the total costs; The rate variations in the different Argentine regions are the result of the distribution processes, which are under the supervision of the provincial governors.Soon, the National Electricity Regulatory Entity (ENRE) will proceed to issue two regulations intended to reflect the increase in the wholesale price of energy in the bills of Edenor and Edesur services, a measure that must be replicated by the entities. regulators of other service companies.
By 2023, the volume of economic subsidies 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.
IMF experts, in the Staff Report , suggested that starting in February, tariff increases of more than 200% in electricity and 150% in gas should be implemented. However, the Government opts for a position of exaggerated prudence, deciding to postpone any rate increase until after holding a new public hearing to establish the validity of the “Basic Energy Basket”, affecting 70% of the population whose income They do not exceed 3.5 basic baskets.
With an eye on April, it is planned to introduce a new scheme that will replace the current segmentation, focusing subsidies on those households whose energy expenditure exceeds 10% of their income. In this way, state support would focus on the amount that exceeds said percentage, in order to alleviate the financial burden on consumers.
