By Santiago Magrone
After the pause arranged in May to moderate inflation, the Ministry of Economy, through the Ministry of Energy, activated a series of resolutions (90-91-92-93/2024) in which it defined, for a period of transition that started this month, increases in the seasonal prices of gas and electricity, with new downward caps on subsidized basic consumption of these services at the Residential level -Users N2 and N3, low and medium income-.
These are consumptions with lower limits to which a percentage “bonus” will be applied to the price to be billed, taking as a reference the rate paid by Level 1 (high-income) users. Anything in excess of these “base consumptions” must be paid at full rate.
The combination of lower levels of subsidized consumption and increases in the production prices of gas and electricity will result in sharp increases in bills in general, and for N2 and N3 users (low and middle income) in particular.
In the resolutions already made official and in force, the portfolio in charge of Eduardo Rodriguez Chirillo ordered the update (1/6 to 10/31) of the Winter Seasonal Programming for the Wholesale Electricity Market, in the Power Reference Price (POTREF ) and the Stabilized Price of Energy (SEP). Added to the Stabilized Price of Transport (PET), they must be invoiced to users based on the aforementioned scheme, of partial “bonus” for N2 and N3. The N1, Large Users (GUDIS) and public lighting pay everything at full rate.
In the same order, Energy also activated new seasonal prices (1/6 to 11/30) in dollars for PIST gas – at the point of entry into the transportation system – to be transferred to end users. Prices vary according to the geographic subzones of the country served by the various distributors, and users N2 and N3 will be partially “subsidized.”
Electricity
From Energy it was detailed that the government established the Seasonal Price of Electric Energy (PEST), which will be transferred to invoices starting in June, and that “to provide greater transparency and stability in costs, the PEE, the PET and the POTREF”.
The PEST transfer will be, according to peak hours (6 to 11 p.m.), off-peak (11 p.m. to 5 a.m.) and rest (5 a.m. to 6 p.m.): ● N1 (high income) and productive sectors (commerce and industry): Between $56,019 and $59,298 /kWh.
● N3 (average income): The base consumption goes to $30,000/kWh, while the excess consumption goes to the values indicated for segment N1.
● N2 (low income): Base consumption becomes $20,000/kWh, while excess consumption will be paid at the values indicated for segment N1.
“In this way, in order to achieve normalization of the electricity sector, a single price is established for all users that will allow residential users to contribute with greater coverage of the supply cost. At the same time, the Government – according as provided for by Decree 465/24 – determines the wholesale price bonuses, according to the income levels of the users and up to a certain consumption limit,” it was indicated.
By way of illustration, if we consider average residential consumption of 260 kwh, the average value of the final monthly bills will be the following, according to segmentation level:
● N1 will go from $24,710 to $30,355
● N3 will go from $6,585 to $16,850
● N2 will go from $6,295 to $12,545
Federal and provincial energy distributors must show on their users’ bills the amount of the bonus that each one receives from the National State.
On this basis, the National Electricity Regulatory Entity (ENRE) and local jurisdictions will define the new tariff tables with the transportation and distribution values, as appropriate.
GAS PIST
The SE noted that “in order to guarantee a sustainable and equitable gas supply for all users, avoid shortages and ensure the economic viability of the energy sector”, the National Government set new gas production prices in the PIST that is They will transfer users starting this month.
This transfer will be made for N1 residential users (high income) and productive sectors (commerce and industry) at 3.30 USD/MMBTU, according to the distributor.
In relation to N2 (low income) and N3 (medium income), by June 2024, the transfer of the new PIST, with the bonuses according to Decree 465/24, will be done as follows:
● N3: The base consumption is 1.50 USD/MMBTU, depending on the distributor. Excess consumption is paid at 3.30 USD/MMBTU.
● N2: The base consumption is 1.20 USD/MMBTU, depending on the distributor. Excess consumption is paid at 3.30 USD/MMBTU. For the Buenos Aires Sur, Chubut Sur, Province of Neuquén, Cordillerano, Santa Cruz Sur and Tierra del Fuego Tariff Subzones, excess consumption is paid at 2.50 USD/MMBTU.
“In this way, in order to achieve the normalization of the electricity sector, a single price is established for all users that will allow residential users to contribute with greater coverage of the supply cost. At the same time, the Government – in accordance with The provisions of Decree 465/24 – determine the discounts on wholesale prices, according to the income levels of users and up to a certain consumption limit,” the Secretariat noted.
By way of illustration, during June 2024, at the three segmentation levels, the average value of the final monthly invoices will be the following:
● N1, with an average consumption of 149 m3, will go from $25,756 to $28,142
● N3, with an average consumption of 171 m3, will go from $24,465 to $26,865
● N2, with an average consumption of 159 m3, will go from $15,638 to $20,797
On this basis, ENARGAS will define the new tariff tables with the transportation and distribution values.
“This update of prices at the Injection Point to the Transportation System is carried out after having postponed said adjustment for the month of May 2024,” Energía recalled, and argued that “in this way it seeks to represent the real costs and variability of supply of natural gas for distribution companies, with the aim of guaranteeing the necessary investments for the sector and responsible use of the supply”.
SUBSIDIZED CONSUMPTION CAPS
So, for users of levels N2 and N3, the National Government reduced the maximum subsidized consumption limits and bonuses on wholesale prices of electricity and natural gas for the so-called Transition Period (between June and November 30, 2024). ), according to Decree 465/24.
Energy maintained that “This marks the beginning of the process to move from a generalized subsidy regime to a focused one, in which the user can know the cost of the kwh of electrical energy and the m3 of natural gas, which is identical for all, and “the assistance that the National State provides to users according to their ability to pay and that reaches up to a consumption limit through the recognition of a lower payment (bonus).”
Regarding the caps or subsidized consumption limits:
1) In the case of natural gas: N1 has no limits. N3 maintains the limits established in Resolution of the Ministry of Energy 686 in force, according to the distributor. The same consumption limits apply to the N2 as for the N3.
2) In electrical energy: N1 has no limits. N3, subsidized amount of 250 kWh/month, replacing 400 kWh/month. The N2 will have a maximum subsidized consumption of 350 kWh/month, leaving aside the fact that these users did not have any limit to subsidized consumption, encouraging efficient and responsible consumption with this measure.
The new consumption limits for electrical users without access to the natural gas service through networks and indiluted propane gas through networks, located in certain bioclimatic zones, only for the period from June 1 to August 31, 2024, are: N3 , 500 kWh/month, and N2, 700 kWh/month.
Consumption less than the established limits is called base consumption. Consumption greater than the established limits will be considered excess consumption and will be paid at the PIST and PEST prices set by the Ministry of Energy, without bonus.
On the other hand, the bonuses on wholesale prices set by the national Government will be the following:
1) Natural Gas: For N1 users there will be no bonus, they pay the PIST (Entry Point to the Transportation System) price set by the Ministry of Energy.
The N3 have a bonus of 55% of the gas price in PIST corresponding to the N1. Excess consumption will be valued at the gas price in PIST, without bonus.
The N2 have a bonus of 64% of the gas price in PIST, corresponding to the N1. Excess consumption will be valued at the gas price in PIST, without bonus.
2) Electric Energy: For N1 users there will be no bonus, they pay the PEST price set by the Secretariat.
N3 users will have a bonus of 55.94% on the price defined for the N1 segment, without bonus. The excess consumption will be valued at the price defined for N1.
And N2 users will have a bonus of 71.92% on the price defined for N1. Excess consumption will be invoiced at the price of N1, without bonus.
Specific subsidy regimes such as Social Tariff and Cold Zone are maintained; and for Public Good entities, Neighborhood and Town Clubs, and other categories of similar non-profit users – in the terms of Laws 27,218 and 27,098 – the bonuses are applied to the price of natural gas and electric energy provided for N2, for the total volume consumed.
SUBSIDY ACCESS REGISTRATION
Resolution 90/2024 (article 8) indicates that “Users who have already requested their inclusion in the Registry of Access to Energy Subsidies (RASE) will not have to register again.”
But users who were included because they were beneficiaries of the social rate (Resolution 631/22) and did not register individually, have a period of 60 calendar days to carry out this procedure.
This article specifies that “the users who have been included in the RASE by virtue of Provision No. 3 dated September 1, 2022 of the former Undersecretary of Energy Planning of the SECRETARIAT OF ENERGY or Resolution 631 of August 2022 of the SE, must register individually, within a period of SIXTY (60) calendar days from the validity of this measure.”
“Once this period has expired, the incorporations provided for by the aforementioned regulations will be void and the benefit will expire with respect to users who have not completed the individual presentation,” Energía warned.
“In times of scarcity and adjustment of State resources, it is necessary to review and reorganize subsidies to contribute to fiscal balance without neglecting help to vulnerable users,” argued Energía, in a very complicated economic and social context.
