30 years ago, Colombia suffered one of its worst energy crises. From 1992 to 1993, during the government of César Gaviria, the El Niño phenomenon led the country to droughts, a low level of hydroelectric power reservoirs and, due to infrastructure failures, a crisis that lasted for a year. year.

Even to counteract the effects of power cuts, the Government made the decision to advance the clocks in the country by one hour to take advantage of daylight.

(You can also read: Creg responds to Petro: ‘Regulatory bodies must be independent’)

That crisis was the basis of the regulatory framework for the public services sector that the president now wants to have gustavo petroHe assures that the idea is to lower the price of services, especially energy, and guarantee that Colombian households have a breather in the midst of the complex inflationary panorama.

«I am going to assume control, the general administration policies of Colombia, directly and personally, based on what the law itself says: first, the general interest and that of the user,» said Petro, and his justification is in the article 370 of the Constitution and article 68 of Law 142 of 1994.

(Of interest: Public services, between lowering rates or stopping investment).

Even the Superintendent of Services, Dagoberto Quiroga, stated that the President has constitutional and legal powers for tariff regulation powers.

«The President can assume directly, via decree and in a constitutional manner, the competence to regulate the rates for home public services in order to reduce costs with a direct impact on citizens, under the protection of numerals 11 and 22 of article 189 and articles 211, 365 and 370 of the Political Constitution and articles 68 and 124 to 127 of Law 142 of 1994”, he stated.

In the same way, Quiroga made reference to a sentence of the council of state on the regulation activity in charge of the State, ensuring that regulation is a State activity that promotes competition in the markets.

Since August 2022, the energy sector and Minister Irene Vélez made a Tariff Justice Pact that changes the Consumer Price Index (IPC) for the Producer Price Index (IPP) in the formula to lower energy prices. Energy. The measure, which is 6 months old, seems insufficient for the Government, because although companies have deployed this and other strategies, the Executive has even thought of using basic inflation to calculate prices because it is lower and less sensitive to shocks supply and demand in the economy.

On the other hand, the Committee of Experts of the Energy and Gas Regulation Commission (Creg) stated that regulatory bodies must have an independent nature to ensure that their decisions are objective, impartial, consistent and technical.

(You can read: Uncertainty in the electricity sector due to Petro’s announcement. Experts give their opinion).

The Creg Committee of Experts stated that regulatory bodies must have an independent nature to ensure that their decisions are objective

In addition, that Laws 142 and 143 of 1994 establish the regime for residential public services, particularly in electricity, and include the functions, in addition to defining the methodology for calculating rates. This, to ensure the availability of an efficient energy supply, capable of supplying demand under social, economic, environmental and financial viability criteria, promoting and preserving competition and coordinating the operation of the national interconnected system, among others.

“The independence of the regulator ensures that, through the exercise of its functions, the State achieves that the regulated agents adapt their conduct to the constitutional and legal fines of respect for economic and business freedom, while establishing the pertinent rules for limit their activity, in favor of the social interest”, says the Creg in its statement.

The economist and analyst Luis Guillermo Vélez emphasized that this decision by President Petro can have profound consequences. «In addition, in the case of the energy sector, Law 143 prevails over 142,» he stipulated. “It is difficult to understand how the President will assume these functions because the public services model is 30 years old, it is entering a complex regulatory framework that also requires techniques. In 30 years we have not entered into rationing, a light bulb has not gone out and continuity of supply has been guaranteed. The previous model, of state companies, had three big blackouts between 1972 and 1992, and an intervention can damage the market or affect foreign investment in these sectors”, he said.

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Vélez points out that if the motivation is the price of the energy rate, the criterion of financial sufficiency must be taken into account, so that the guaranteed rates that companies have how to cover their operation, maintenance and investment costs. “The Government can intervene, but if the model is not made sustainable, the investment of the companies can be lost and it must be taken into account that the rise in prices is not due to speculation”, he pointed out.

Along the same lines, Camilo Sánchez, president of the National Association of Public Services and Communications Companies (Andesco), said that Institutionality cannot be ended, much less ignore key technical aspects in setting tariffs for energy and other public services, as it can have serious consequences going forward.

«It would be an unprecedented setback for the country» and the economic law of supply and demand would fail. “These non-technical political positions can push more bullish effects,” Sánchez said.

In addition, he pointed out: “It would be unfortunate to fall into unilateral decisions that will affect the service and that could cause blackouts in some regions. Let’s remember that the most expensive energy is the one you don’t have,” he said.

For his part, the executive director of the National Association of Energy Generating Companies (Andeg), Alejandro Castañeda, stated that although the Government is empowered because it is in charge of managing the surveillance and control of public services, the electricity law and also the public services law of 1994 develops and implements the separation of roles in the State.

«The governments that have taken control have done so for a specific issue, such as adjustments in operation or prices on the Caribbean coast, but the effect of the President’s idea seems to be a setback and all the consequences are not yet known,» classics.

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The Colombian Association of Engineers (Aciem) said that the country is concentrating on current problems, «neglecting short-term risks, such as the threat of a possible El Niño phenomenon in 2024-2025, which would be serious for the economy. Discussions must be held and the mistakes of the blackout of 1992 not repeated”.

In this regard, the former Minister of Mines and Energy Amylkar Acosta points out that this is just the reiteration of the announcement that the President made last year in the Andesco Congress of his intention to intervene in the CREG.

“Until now that decision has not been made, although in my opinion it can be taken because at the end of the day, although the regulatory commissions are independent and autonomous, they have functions that they exercise delegated by the Presidency. Only when it is made, if the decision is made, would the scope, temporality and purpose of said intervention by the Executive be known. This is unprecedented in the country and causes unease, bewilderment and uncertainty in the sector. It will dawn and we will see”, pointed out Acosta.

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ECONOMY AND BUSINESS