In April of this year, Governor Ricardo Quintela, following the decision of President Javier Milei and his Minister of Economy, Luis Caputo, to significantly increase the electricity rate, made the political decision to annul the measure through a decree, leaving without effect the increase in the electricity bill throughout the province.
This was possible thanks to a considerable effort on the part of the Province, necessary to avoid aggravating the situation of the population and economic sectors. The measure benefited both residential users and industries and businesses, since the increases were exorbitant and would have hit the pockets of Riojans hard.
The new tariff table at the beginning of the year, established through resolution 07/2024 of the national government, showed significant increases in the first seasonal table of the year, with increases of between 400% and 700% depending on the categories. In some variables such as power and transportation, the increases were between 1,700% and 3,500%. This considerably increased the rate that users had to pay throughout the national territory, since these values refer to the active energy, power, transportation and generation of the national interconnected system.
From the tariff table in force in November and December 2023 and January 2024, there was a great jump in energy values, where the reference value of 20,000 pesos per mega went to 44,000 pesos. This accompanied the inflationary policy of Javier Milei’s government, which devalued the currency and increased prices in stages. Energy was no exception, and with the elimination of subsidies began their reduction in the different categories of users.
It is necessary to emphasize that Governor Quintela adopted a similar measure during the pandemic, freezing service rates and avoiding power cuts to users who could not pay. Regarding residential categories N1, N2 and N3, the group most affected by the first increase ordered by the national government was category N1, “without subsidy”, with an increase of 800%.
The value went from 20,000 to 44,401 pesos, affecting both general and industrial users, businesses and small industries. This was also reflected in public organizations and public lighting, where, when comparing resolution 884/2023 with the first 007/2024, the increases had a great impact on the general user.
It should be noted that Governor Quintela decided to reverse energy rates in the province to support those affected by the elimination of the national subsidy. The main request came from provincial producers who use electricity to extract water and irrigate crops, in addition to other groups affected by the elimination of subsidies.
The resolution in force in the last quarter of last year and this year, which covered February, March and April, showed very slight increases in the N2 and N3 categories, maintaining the subsidy values. For the N2 residential areas, the least wealthy, a value of approximately 2,900 pesos per mega with no consumption limit was established.
As of June 1, there was not only a new increase, but also a reduction in subsidies for users of residential categories N2 and N3. Resolution 90/2024 determined a reduction of the subsidy in category N2, which previously It had no consumption limit, now establishing a consumption limit for hot and cold areas. In La Rioja, this meant a double impact, not only because of the increase in the value of energy due to the limitation of the subsidy, but also because the province is located in a warm area, where subsidized consumption is reduced by half compared to the cold areas.
In cold areas, the subsidy is up to 700 kilowatts, while in the warm region it is 350 kilowatts. This implies that the lowest income category is no longer exempt from consumption, but rather has 350 kilowatts at a value of 16,055 pesos per mega, an increase of 440%. Until 2023, there was no limit on the surplus in this category, but now the surplus went from 2,900 to 57,214 pesos, which implies an increase of 1,820%.
In category N3, subsidized consumption was reduced to 400 kilowatts, whose value was 3,700 pesos, and the surplus is paid at 20,460 pesos per mega. This is the flat rate or without subsidy.
The last residential category, which is intermediate income, enjoyed up to 400 kilowatts with a differentiated price of 3,750 pesos within that subsidized range. Now, that category has a value of 25,200 pesos per mega and the consumption limit was reduced to 250 kilowatts. The subsidized band decreased and the surplus for N3 users, with intermediate income, is 57,214 pesos, the same value as for N2. The increases are observed quarter by quarter.
In 2024, the resolution of the Ministry of Energy established these values for June and July, with another increase planned for August, September and October, reaching 78,000 pesos on average. The trend indicates that, for the summer quarter, it is likely that there will be no subsidy at all for any category of users.
