:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/P4ZSSRPY5WZXGF43LAMO3T545Q.jpg "Gustavo Petro would change utility pricing methodology 1")
On Thursday, February 16, the President Gustavo Petro signed on Decree 0227 of 2023. This allows you to assume control of all utilities in the country. This work had not been carried out by a national representative since 1994, when responsibility was delegated to the Energy and Gas Regulatory Commission (Craig) and the Commission for the Regulation of Drinking Water and Basic Sanitation (BOW). The intention of the head of government, according to his words, will be to defend users; but, a series of modifications of the aforementioned entities are planned, as well as a tariff adjustment, which has plunged the sector into uncertainty, not only because of the departures that this would generate among its civil servants, but also because the underfunding and shortages could be generated.
Former mines ministers see institutional framework at risk if Gustavo Petro regulates public services
The former officials warned that the execution of projects and the investments needed to guarantee the country’s electricity supply would be affected if the president materialized his intention.
He Decree 0227 of 2023 specifies that the President may:
“Resumes for a period of three (3) months from the date of entry into force of this decree, the general attributions delegated to the Commission for the Regulation of Drinking Water and Basic Sanitation and to the Energy and Gas Regulatory Commission exercised by decrees 1524 and 2253 of 1994 and other concordant regulations, which, in accordance with article 68 of law 142 of July 11, 1994, will be exercised by the President of the Republic Consequently, the Regulatory Commissions will continue to promulgate the specific administrative acts that they exercise on the date of promulgation of this Decree”, detailed in Article 1.
The initiative was signed and approved by 3 ministers: José Antonio Ocampo (Treasury), Irene Vélez (Mines and Energy) and Catalina Velasco (Housing). To these is added the director of the National Planning Department, Jorge Iván Gonzales Borrero.
In the Section 3 details the regulations that the president will authorize. Subsection D specifies that among all the others, the criteria of the tariff regime, redistribution and financial autonomy of the services and of the sector in general are included. This can be done on your own, or if Petro If requested, I would ask the regulatory commissions (which are the ones that have lost said functions) and/or other entities or companies in the sector concerned.
Gustavo Petro would assume utility regulatory duties for three months
The national government has defined the temporality of the decree that it will issue so that the President of the Republic sets the tariffs for water and electricity services
Although this generated some fear and uncertainty, the government began to send messages of calm. The Superintendent of Public Services, dagoberto quirogasaid that it is not true that rates are going to be lowered, directly, what the president is going to do is rethink the methodologies with which prices are set:
“The president assumes the functions of a general nature, and not specific, and the objective is to rethink the methodologies for fixing and establishing the tariffs, mainly, of energy, since this was the most controversial issue due to the excessive increase, but we consider that within these faculties will touch the methodologies of the tariffs of aqueduct and purification”, he explained in an interview with The Republic.
The superintendent added that one of the reasons for the decision was what happened with the so-called “Tariff justice agreement”. This aimed to lower the prices of energy services, but did not produce the results expected by the government.
Gustavo Petro assumed the functions of regulating the public services
Decree 0227 was signed on February 16, 2023 by the members of the ministerial cabinet and provides that the President of the Republic sets the tariffs for water and electricity services
This is where the change in methodologies comes in, and this is where the sector enters into uncertainty, since certain technical and regulatory parameters could be omitted, or even unconstitutional, such as the Decree 0227.
At the end of January, when Gustavo Petro clearly indicated his intention to take control of the public services, the superintendent in charge of the sector, Dagoberto Quiroga Collazosassured that the supply of said orders will be guaranteed, but at a reasonable cost.
The first step would be to review the technical criteria, which will determine the calculation and formulation of the rates. According to great servicein the case of energy, the model has not been revised since 1994.
The idea remains the same until after the publication of the decree, which is why some technical meetings which, among other things, will seek to dispel uncertainties and fears, with the aim of mitigating the future risk of the decisions that will be taken. Unofficially, it was announced that this would be the first point of contention, since the president could request certain specific concepts, and if they are not issued, they could generate departures from the technical commissions.
After these meetings, other meetings would take place with the service provider companies. With these two concepts, to put it in a way, the representatives of the userswho will detail the observations or give the go-ahead.
So far both Craig as the Cra they start by creating what is called a technical component, which essentially brings into discussion the internal or external factors that would modify the components of the equation that sets the tariffs. This one is socialized in front of the agents of the sector who emit a concept.
The commissions receive the comments and make the respective adjustments, based on the concepts delivered, so that the resolution is then issued and the respective tariff adjustment is made.