The government of the province of
Buenos Aires
, led by Axel Kicillof, resolved this Friday to
transfer the increase in the wholesale price of energy to the rates and the removal of subsidies
defined by the National Energy Secretariat.
In a statement, the provincial
Ministry of Infrastructure
, headed by
Gabriel Katopodis
, indicated that "the increase in energy affects high-income residential users and middle-income users who consume more than 400 kilowatt-hours (kWh) per month." , by
118%
."
"In the extreme case of
small businesses
- which are those that consume less than 800 kWh per month -,
the increase reaches 413%
. There is also an increase for public organizations in the Education and Health portfolios, which will suffer an increase in 186%," said Infrastructure.
Likewise, he highlighted that "the defined increase will be reflected in the February consumption of Buenos Aires users, since it is 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 that sense recalled that "in the context of the pandemic and the subsequent crisis,
rates remained well below the increase in costs
."
"In order to sustain the provision, the 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 facilities to face the situation of growing debt in the payment of energy, since the partial payment of the invoices to the Wholesale Electricity Market Administration Company (Cammesa) allowed them to cover a large part of their costs," highlighted the provincial portfolio.
The companies that operate the service in the interior of the province of Buenos Aires belong to the
Desarrollo Energética group (DESA)
and are
Edelap, Eden, Edes and Edea
.
On the other hand, the Katopodis team stressed that "the current scenario on the part of distributors and cooperatives is one of a
high level of indebtedness
," and specified that "in the case of the cooperative sector, a greater level of severity is evident."
He indicated that "although it is a highly 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 they purchased."
"In this context, the national government has ordered providers to catch up with this debt. For this reason, in addition to the increase in the cost of energy,
there will soon be an increase in one of the components of the rate: the Value Distribution Aggregate (VAD)
that will be used to clear the debt with Cammesa and guarantee the operation of the service.
Adding both, the rate will suffer an average increase of 180%
," the Ministry warned.
For this reason, he pointed out that "in this situation of increasing wholesale energy costs and payment of debt with Cammesa, the objective is to rebuild the operating income of the distributors, guarantee the payment of the current bill of the Wholesale Electricity Market Management Company and carry out maintenance and
investments
in the network to guarantee the service".
The next increases
"From the removal of subsidies, the increase in the wholesale cost of energy and the increase in VAD, the average increase in electricity bills will be 180%. A high-income residential user (N1) who consumes 150 kWh month will go from paying an average of $8,600 per month to paying $24,000," Infrastructure detailed.
And he added that "in the case of low-income N2 users, if you paid $3,500 per month consuming 150 kWh in January, in March you would pay $10,500?", and noted that "these increases are similar to those that were already recently applied to the invoices of Buenos Aires residents who live in the AMBA, concession areas of Edenor and Edesur, both distributors under national jurisdiction.