The Law of the Mountains | How to lower energy rates?

The Mayor Pumarejo states that it is necessary to revise the calculations that determine the energy rates on the Coast. “The dams are full and rates are rising,” Pumarejo says, seeking an explanation for this paradox.

“Energy generators and transmitters report extraordinary half-year gains. How are they not going to do it if they increase the rates according to the IPP, but adjust their costs more for inflation? This is not the time to be a driver of inflation,” said the mayor of Barranquilla.

But what has actually happened to energy rates in recent months? Since January 2021, energy tariffs in Colombia have increased by an average of 30 percent. This is the highest increase in the past 10 years. Meanwhile, power generator profits rose exorbitantly, averaging 105 percent. An atrocity!

Where is the secret to the value of energy tariffs and why are the inhabitants of the Caribbean in a state of nerves? The value paid for energy is the combination of six variables: Generation (G) + Transmission (T) + Distribution (D) + Recognized Losses (PR) + Commercialization (C) + Constraints. These six components bring together the cost of getting energy from where it is generated to the end user. The marketers are therefore a link in that chain.

Power generators (G) are the beginning of the value chain. Energy is generated for domestic and business use via water, gas, coal or liquid fuels. Electricity is diverted through transmission lines (T) observed throughout the country which act as highways. Once the energy reaches the regions, the distribution companies (D) are responsible to adapt it to the required voltage level and deliver it to the end customer. But they also need to repair damage, invest and repair local networks.

During this transmission and distribution process, the so-called Energy Losses (PR) occur, which are caused by the normal transit of energy through the networks or by irregular connections, the infamous “energy theft”, which is common in the Caribbean. These losses are recognized to companies that commit to reducing them and achieving specific goals.

Then the marketers (C) come into action, who are in charge of the billing of the service and who play the role of “villains” of the film, because they are the ones who show their faces. They are also responsible for handling requests, requests, complaints and claims from users. And the last link in the chain that determines the value of the tariff is the restrictions (R), which correspond to the higher costs incurred due to the need to provide the service with localized generation which is more expensive than the cheapest available generation. . the interconnected system, which is charged to the users. This collected money is transferred to power generators.

So the value of the energy tariff – our monthly headache – is due to a range of factors, including marketing.

To put it plainly, the marketers keep their faces in front of the users and “endure the death” of the insults and reprimands of those who are dissatisfied with the service. In reality, it is still one of the actors in the value chain, but it is clear that its activity does not affect most variables. Is it possible to lower energy rates? Who’s who when it comes to rate hikes? Can Petro handle this challenge, which is also a campaign commitment?

Source: El Heraldo