Gustavo Petro seeks to reduce the cost of utility tariffs in the country. crush

In connection with the Decree 227 of 2023by which the president Gustavo Petro assumed the general regulatory functions of the public service regulatory commissions, in particular the Energy and Gas Regulatory Commission (Creg)to lower the price of pricesunions and associations in the energy and public services sector have proposed principles on which to move forward together.

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The President of the Republic assured that the decision was made because “a model and a design that must be changed have been exhausted”.

This, according to them, to avoid a new delay in investments which jeopardizes the country’s electricity and gas supply, a technical, economic and legal adjustment in what is really necessary and in accordance with the temporality of the macroeconomic situation and a final positive effect is obtained for all, taking into account the efficiency of the price of energy and the tariffs that govern the provision of services. electricity and fuel gas services.

The unions that made the proposals are Andeg, Andesco, Asocodis, Aciem, Andi, Naturgas, SER Colombia, Acce, Gasnova, Acp, Asoenergía, Acolgén and the Colombian Energy Chamber

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According to them, the fundamental principles of the electricity and fuel gas sector which must be preserved and on which they seek consensus are ten in number. These are:

  • Respect for freedom of enterprise and the participation of public, private and mixed capital in the development of the sector, always striving for a free market with open competition in the activities that allow it; under Article 333 of the Political Constitution.
  • Respect for the institutional framework and the independence of the functions established for each of the entities that make up our sector.
  • Universalization and financial accessibility of essential energy services.
  • Pricing efficiency in regulated services and in established markets.
  • Reliability and quality in the provision of services.
  • Financial sufficiency for public service providers.
  • Impulse in the hydrocarbon and fossil fuel exploration processes that support the country’s energy demand.
  • Legal and regulatory stability for current and future investments and the provision of services.
  • Compliance with environmental and sustainability standards associated with the technical, economic and legal principles of the energy sector.
  • Simplification and agility of procedures for the development of infrastructure expansion projects in all sectoral activities.

According to these, the energy sector seeks to reach agreement on basic structural principles strengthen the energy service, infrastructure development and framework for regulatory operation and a market in which activities are developed that allow their sustainability for the good of the country and users.

“We hope that the national government, in a broad and impartial manner, develops the above principles for the good of the country, in a context where providers and users achieve sectoral modernization that builds on what has been built, ensures sufficiency and self-sufficiency of supply and enables efficient tariffs, which reflect the efforts needed to enhance reliability and safety,” they said.

Similarly, they underlined that the representatives of trade unions, associations, users and service providers want to interact jointly and personally with the national government on the findings to achieve real development adjusted to the proposals for progressive updating that they share.

Moody’s Investors Service Vice President of Credit, Adrian Garzaclaimed that President Petro’s new executive order aimed at controlling regulatory bodies, such as the Craig (Commission for Energy and Gas Regulation) and the BOW (Commission for the Regulation of Drinking Water and Basic Sanitation) for a period of three months to create a greater uncertainty in the energy sector, which could delay new investments in Colombia.

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Garza noted that the Colombian government’s initiatives aim to control rate in an environment of high inflationbut issued a credit metrics warning, mainly because Moody’s was one of the rating agencies that downgraded Colombia’s rating in terms of investment gradewhich did not allow him to access credit at a lower cost.

“Although the measures have not yet been disclosed, unilateral decisions that dampen revenues and postpone cost recovery in 2023 will negatively affect the credit measures of utilities and power companies that operate in the country,” underlined the vice president of credit Moody’s Investors Service.

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