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Increases in electricity and gas prices, elimination of subsidies and social tariffs: what is the plan of the new Secretary of Energy? - Infobae
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Aumentos en luz y gas, eliminación de subsidios y tarifa social: cómo es el plan de la nueva secretaria de Energía
El PRO no solo acercó la incorporación de funcionarios al área, como la nueva secretaria María Tettamanti, sino que hablan de un acuerdo programático. Los detalles de la posible vuelta de la tarifa social y el riesgo de cortes de luz en el verano
www.infobae.com
October 22, 2024
The PRO not only brought forward the incorporation of officials to the area now led by María Tettamanti, but they also speak of a programmatic agreement. The end of the segmentation of users by socioeconomic level and the risk of power cuts in the summer
By Augustin Maza
The pace of increases will depend on the evolution of inflation (Illustrative Image Infobae)
The agreement between Mauricio Macri and Javier Milei on the future management of energy policy not only contemplates the incorporation into the Government of officials who will answer to the former president. The PRO also presented a roadmap that contemplates the increases in electricity and natural gas that will be applied during the next year, with a new subsidy scheme that would help accelerate the fiscal adjustment. The pace of this path of increases will depend on whether it does not put at risk the Government's main objective: the deceleration of inflation . Going forward, the other point of the new plan will be the adaptation of the sector to facilitate the arrival of investments in generation, transportation and distribution.
In any case, in the short term, work will focus on a plan to mitigate the risk of power cuts during the coming summer, something that is of great concern in government offices due to the possible political impact of a supply crisis following the sharp increase in public services this year.
According to Infobae , sources familiar with the talks have told them that Macri's collaboration goes beyond the appointment of María Tettamanti as the new Energy Secretary , replacing the ousted Eduardo Rodríguez Chirillo . It is a "programmatic agreement" divided into two parts: the clean-up of the sector's accounts to achieve financial equilibrium within a year - that is, users pay the full cost of their energy bills - and, in a second stage, changes in the structures of the area in order to make management "more agile."
The subsidy scheme that the PRO proposed contemplates the return of the social rate to replace the segmentation that Alberto Fernández launched in 2022. This plan was outlined by Patricia Bullrich 's team during the presidential campaign that was led by the former Secretary of Energy, Emilio Apud , who proposed Tettamanti's name to the Coordinating Secretary of Energy and Mining, Daniel González , after Macri and Milei sealed the collaboration agreement that was announced last week.
The conditions for accessing the benefit would be much more restrictive than the current ones and, in the ideal scenario, beneficiaries would pay the full cost of the bill but would receive compensation through a direct transfer via a bank account or a card.
Secretary of Energy, Maria Tettamanti
The tariff segmentation scheme contemplates the division of residential users into three universes with respect to their income in relation to the Total Basic Basket (CBT) of Indec : high (Level 1), low (Level 2) and medium (Level 3). Although today no segment covers the full cost, it is these last two segments that receive a bonus on the energy prices they pay in their bills, with consumption caps.
Currently, there are 8 million electricity users who are N2, 3 million who are N3 and 5 million who are N1. This means that 7 out of 10 households receive help from the State to meet their bills. During Milei's administration, nearly 1 million users have had to request the subsidy to meet the payment of the services due to the increases applied.
Obviously, the Energy sector recognizes that it will take time to move forward with a change in the current system and has set a goal of one year for “the sector’s accounts to be balanced.” “The idea is to carry out a clean-up not only with regard to income levels but also with regard to the consumption of goods and services. Only 20% of the total number of users should be subsidized ,” commented a source.
This scheme completely discards the Basic Energy Basket (CBE) proposed by Rodríguez Chirillo, which practically implied a personalized subsidy for each user. The Government always doubted the feasibility of this idea, because it required a very detailed level of information that was not available and that required the collaboration of the provinces.
The timing of the increases will be decided by Caputo based on two central variables: the objective of maintaining fiscal balance and not jeopardizing the slowdown in inflation. Apud said this Monday that a 40% real increase in energy rates remains and acknowledged the fine tuning that the Minister of Economy has in mind. In 2024 there was a cut in subsidies equivalent to more than USD 3,000 million and they expect a similar adjustment for next year, according to the 2025 Budget .
Official fears of possible power cuts in the summer (EFE)
According to this media, one of the quarrels between Rodríguez Chirillo and Caputo was his intention to move much faster in raising rates to give signals to transport and distribution companies that it was time to invest, without the risk of having their income trampled on again. The latest episode was the call by Enre at the beginning of the month to electricity transporters to a public hearing on November 5 to advance the Five-Year Tariff Review (RQT) , in which the investment plans of the companies and the future increases that would guarantee these disbursements were to be put up for consideration.
A week later, the same entity published Resolution 743/2024, in which the consultation was suspended. “Taking into account the positive reaction of the economy to the actions implemented by the Ministry of Economy and the notable inflationary slowdown verified to date, it is reasonable and prudent to postpone the Public Hearing until the date that is duly determined,” the norm said in its recitals.
Another part of the agreement is that more officials linked to Macri will join the Energy sector. It is assumed that Darío Arrué will continue to lead Enre, but Carlos Casares will continue to lead Enargas, a man well regarded by Tettamanti. The idea of merging the entities in the medium term remains in the Government. The Undersecretary of Energy Planning, Mariela Beljansky , will also leave her place and the future of other Undersecretaries remains to be defined.
The Econojournal portal reported that engineer Eduardo Hollidge will replace Jorge Garavaglia, the man Chirillo appointed as general manager of Cammesa, next month . The departure of Carlos Bastos as director of YPF, advisor to the outgoing Secretary of Energy, is also expected.
Rate increases should not jeopardize the inflation reduction sought by Caputo
The PRO plan for Energía Argentina deserves a special mention, a company that they consider should disappear and have its functions absorbed by the private sector. The firm is in charge of energy imports, tenders for key infrastructure projects, such as the Néstor Kirchner Gas Pipeline or the reversal of the Northern Gas Pipeline, the negotiation of the companies in charge of building the dams with Chinese financing, among many other functions. It is part of the second stage that Tettamanti has in mind.
Chirillo had made official a few weeks ago the Summer Plan 2024-2025 to avoid tensions that put the electrical system at risk at times when consumption throughout the country is soaring due to the heat. The planned measures have to do, among other things, with greater imports from neighboring countries, higher remuneration for generators, contingency plans with distributors and coordinated cuts with large industrial users. The sector remains concerned because it sees a deficit that will be difficult to overcome at the most critical moments.
Publicly, the government maintains that it will be able to get through the summer without a crisis, but off the record it is concerned and points to a certain lack of foresight on the part of the now ex-Secretary of Energy, which added to the episodes that occurred with gas during the winter. They fear the social impact of such an event after the strong increases in rates that occurred throughout the year.
