EPM: options to freeze energy rates

EPM: options to freeze energy rates

Yesterday the mayor of Medellin, daniel quinterosent a letter to the president Gustavo Petro requesting that EPM be authorized to freeze the electricity rate in the markets it serves.

It should be remembered that Public Companies of Medellín Its subsidiaries are marketing companies that serve 12 departments, as well as the capital of Antioquia. These markets are served by Afinia, Cheq, Cens, Edeq, EPM and Essa.

(You may be interested in: How viable is Petro’s proposal on democratizing energy).

In the letter, Quintero points out that “it is increasingly difficult to sleep peacefully when we see how the cost of living has risen for our citizens”, for which he celebrated the decision of the president to resume some functions of the Creg with the aim of controlling the rise in prices of this public service.

It should be remembered that the The Energy and Gas Regulation Commission (Creg) is the one that issues the rate option resolutionsa mechanism through which companies can request to freeze rates, acquiring a liability with companies in the chain, such as generators, transmitters and distributors.

(Also read: ‘Mayor should have asked EPM manager to freeze rates’: Andesco).

However, he Decree 0227 of 2023 gives the president the possibility of assuming general functions of the Creg. However, sources consulted explained that this is a specific task for the Commission, so it would not be within the powers of the president.

Marketing companies have other possibilities to freeze rates without the need to proceed with the presidency.

(We recommend: Coup in exchange for contracts for the provision of services with the State).

Sources explained that the reason why EPM and the mayor of Medellín They are carrying out the process through the Presidency has to do with the fact that this process is carried out with a government subsidy.

This would be done with social investment resources that would offset the difference between the value paid by users and the unit cost of the kilowatt, based on which payment is made to other actors in the chain.

(Keep reading: Find out the dates of the allocation auction called by the Creg).

This since the subsidiaries of the Group totaled close to $1,680 million in debts for tariff option with a cut-off as of June 2022.according to data from the Superintendence of Public Services, with which increasing this debt could be dangerous for the financial situation of the companies.

If authorized to freeze the rate, it would impact 35% of the countryQuintero said.

(You can read: Quintero asked to freeze the rate of public services in charge of EPM).

However, The mayor did not specify with what mechanism this freezing would be done or where the resources would come from to achieve this. Although he pointed out that in the case of the Caribbean coast, where Afinia operates, they have proposed the creation of a price stabilization fund, to which “we would be willing to contribute resources”.

Andesco, a union of public services, affirmed that a decision of this nature, which implies costs and investments are “of the exclusive spring of each company”, noting that the company must have the analyzes for this.

About, EPM has not spoken explaining the financial analysis to make this request and what would be the mechanism to freeze the rates.

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Written by Editor TLN

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