The decision of President Gustavo Petro to assume the regulation of public services, a task of the Energy and Gas Regulation Commission (Creg) in the case of electricity, has left more doubts and suspicions than certainties in the sector.
Juan Benavides, an associate researcher at Fedesarrollo, assured EL TIEMPO that after the rationing of 1992, the electrical system was strengthened and decisions were made without the endorsement of the Creg, in which some ministers have a voice and vote. may jeopardize necessary investments to guarantee reliability and continuity in the provision of this essential service.
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With all the regulations that were created as a result of the rationing of 1992, did Colombia remain shielded?
It’s not that it’s armored, but the probability of a blackout occurring is smaller because the entire ownership scheme has been changed and there are incentives for each generator to offer their best possible rate.
Before, a systemic error occurred because everything was in the hands of a single agent. ISA did the dispatch and the possibility of someone telling them that something was wrong was very low because nobody had the technical capacity to do it, but now, with an established market, there are more people studying hydrology and other issues.
The threat that exists is that, by perceiving a greater risk, there will be less investment
From the operational it is more difficult (without it being impossible) that there is a rationingand from the point of view of investment, with laws 142 and 143, an orderly revenue mechanism has been built for generation (reliability charge) so that new installed capacity enters the system and guarantee that there is more firm energy, which It is a scarce attribute in Colombia because it is a hydraulic country and with a low reservoir capacity.
Thanks to the current reliability scheme, with a spot market, an energy exchange, some companies that are responsible for their profits and losses, and a regulation so that the networks comply with the standards of the quality of service has ensuredcoverage is greater than 96 percent at the national level and the possibility of rationing has decreased and, in effect, it has not happened since 1992.
If President Petro assumes the regulation of services, could the electricity sector be at risk?
The risk is that, faced with the threat of intervention and price formation, which are not technical, or of lower rates according to non-financial or financial sustainability criteria, in addition to putting a ceiling or limit on price offers on the energy market, it is possible that there will be fewer investments because there will be more intervention risks and, therefore, companies will prefer Go to other markets.
The threat that exists is that, by perceiving a greater risk, there will be less investment, and having less investment does increase the probability of rationing. One cannot ensure this exactly, but there is a tendency for risk to increase and if this persists and is not clarified, the investment can be lowered and the reliability of the offer reduced.
(Also read: ‘Bogotá, Cundinamarca and Meta are not at risk of blackout’, says the Government)
Is it correct that regulation continues to be in the hands of the Creg?
President Petro already has his representatives in the Creg, several ministers have seats. Therefore, he already has a way to raise his concerns and needs for improvement, which surely exist.
But that the president directly assumes his functions generates a lot of noise and a fear that they end up being decisions without technical bases and without discussing them with the Creg team.
What reforms will be made so that rates continue to drop?
The policy should not be that rates go down because if, rates should reflect market risks and realities. Right now the world is facing high inflation, both on the producer and consumer side.
It cannot simply be said that rates have to be lowered, because if this is done without adjusting the price with the risk assumed and the existing inflationsit ends up under-remunerating and deteriorating the capacity for investment and expansion.
Obviously that You have to find ways to lower prices. and defer, if possible, the charges. There is already a rate option that can be the way out to distribute the rate over time and ensure that this charge does not harm the finances of companies so that they can continue investing.
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Will the hydroelectric tariffs be changed?
No, what What needs to be strengthened is the surveillance function of the Superintendence of Industry and Commerce to avoid conduct harmful to competition, but the hydraulic companies have the duty to quote the value of water and this contemplates the value of the resource in the future duly discounted in various scenarios.
Despite the fact that a small or medium-sized reservoir is full at the moment, that does not mean, in any way, that the water is worth zero because given the probability of a strong El Niño phenomenon, water may have a higher cost and it makes sense to price as much as possible. high enough not to leave dispatched and store water.
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What you have to do is try use existing tools and surveillance to avoid that there are positions of abuse of dominant position. The instruments already exist and there is no need for direct intervention by the President.
