The board of directors of Empresas Publicas de Medellin (EPM) I was going to define, this Friday, May 20, if froze household electricity bills, according to what the general manager of the company, Jorge Andrés Carrillo, had said. However, the meeting did not reach a conclusion and a decision would be made during the last days of May 2023.
(See: The areas where the energy rate would rise the most due to El Niño).
EPM, which is controlled by the Medellin Mayor’s Office, produces 27% of the country’s electricity, therefore, freezing your rates would have a “immediate effect” about inflation, said manager Carrillo.
“We believe that we can contribute to its stabilization“, he added.
Colombian inflation got down a bit in April, at 12.82%, after almost two years of constant increases that took it to its highest level since 1999, above 13%
Energy bills are linked to the producer price index and they are also a key component of the consumer basket, creating a feedback loop whereby an increase in energy costs can cause inflation to rise, which then drives up energy bills even higher.
(See: Due to El Niño, energy increases would be stronger for 35% of users).
This year, the Petro government issued a decree that would allow the president to assume the functions of the Energy and Gas Regulation Commission (Creg) and of the Commission for the Regulation of Water and Basic Sanitation.
However, the Council of State suspended the decree saying that President Petro cannot assume those functions.
The mayor of Medellín and president of the board of directors of EPM, Daniel Quintero, has publicly sought Petro’s approval to freeze utility bills, citing the rise in cost of living which, he said, was aggravated by “irrational” increases in household bills.
Fitch Ratings has warned that thePetro’s unprecedented move to curb rising electricity rates” could jeopardize the necessary expansion of the country’s electricity generation capacity.
(See: ‘Without Hidroituango, surely, there would be rationing’: EPM).
After years of delays, EPM was able to start operations on the first two units of its hydroituango at the end of 2022.
Hidroituango.
The next two, out of a total of eight units planned, are expected to be ready before the end of November 2023, Carrillo said.
“We are in a period of increased consumption and we have an El Niño phenomenon with probably 90% occurrence, but we do not know how long it will last“, he indicated.
(See: 87% of Colombians do not know what the energy transition is).
“It is a responsible decision to save water in order to withstand a drought phenomenon in advance“.
A change in the El Niño weather pattern could reduce rainfall and therefore cut off water supply to hydroelectric dams in the last months of 2023.
EPM is one of the largest companies in Colombia, with investments in energy, water and waste disposal in several countries in the region.
Bloomberg
