The Superintendency of Electricity (SIE) has delayed the application of new electricity rates for at least a month. The rise in the electricity tariffs, just recently revealed, is intended to get the government out of the need to subsidize the nation’s electricity distributors (EDEs). The increases were approved as part of the Electricity Pact. As the plan now stands, it will be 1 November 2021 when the new rates will go into effect.
Apparently, the electricity distributors needed to study their current rates and the proposed rates before passing these on to their customers.
The two-fold process will begin 1 November 2021 and extend until 31 December 2021. Phase II of the plan will begin on 1 January 2022 and extend until 31 December 2026.
Government subsidies have been provided to the EDEs for many years, and with the signing of the Electricity Pact, the idea is to gradually eliminate these.
Most persons have no idea of the inefficiencies of the nation’s electricity distribution system. Without much exaggeration, it is simply a combination of poor transmission infrastructure, and poor management of the distributors.
According to some studies, the EDEs loose as much as 30% of the electricity they order from the generators. They order 1000 MW and receive, due to poor transmission lines, just 700 MW. These 700 MW are then distributed to clients, who, in turn, only pay about 75% of their bills. These poor collections rates have been improved somewhat, but they are still very high. So, the EDEs end up owing the generators for 1000MW, of which only 700 was received, and they sold that to their clients who only paid for maybe 75% of what the received. This is the reason behind a subsidy being paid to the EDEs.
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Diario Libre
4 October 2021