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    Six regions at risk of losing benefits that drive natural gas massification

    August 8, 2022 - CE Noticias Financieras


      After the Congress of the Republic approved by majority the bill that establishes measures to promote the massification of natural gas, the Ministry of Energy and Mines (Minem) sent to the General Secretariat its opinion on the autograph of the Law that establishes measures to promote the massification of natural gas (PL 679).

      It should be noted that the referred bill, with modifications with respect to the initial version of the Executive and the majority opinion of the Energy and Mines Commission, was approved by majority (108 votes) in favor and exempted from the second vote.

      In this respect, the Minem noted some points of the regulation that would not benefit, as expected, with a lower final price to residential users.

      For the financing of the referred natural gas massification projects, the referred PL contemplates the use of SISE and FISE resources. In line with the above, the aforementioned proposal contemplates the creation of a compensation mechanism for access to natural gas, whose purpose is to level the final prices for the users of the natural gas distribution service by pipeline network at national level.

      This compensation mechanism, according to the General Directorate of Hydrocarbons (DGH), is financed through a surcharge to the natural gas transportation service through pipelines and is reflected through a discount in the bill of the beneficiary users. The present Law does not reach private concessionary companies that have a contract in force with the State.

      "As mentioned by the DGH, PL 679 sent by the Executive Branch and the majority opinion approved by the Energy and Mines Commission, does not contemplate the exclusion of the geographic areas that are operated by a private concessionary company. In this sense, the present exclusion approved in the autograph, restricts the financing of resources from the Energy Social Inclusion Fund (FISE) and the Hydrocarbon Energy Security System (SISE) for the execution of projects for the massification of natural gas in the geographic areas of Ancash, Cajamarca, La Libertad, Lambayeque, Lima and Ica, in which there is a concessionaire", the document details.

      Along these lines, the exclusion of zones would not allow reducing the final price for residential users. In other words, it would still be more expensive to have natural gas in areas that do not yet have a concession.

      "On the other hand, the exclusion of the mentioned geographic areas would prevent the application of the compensation mechanism for decentralized access to natural gas and the surcharge in the natural gas transportation service through pipelines to users in any of the regions that currently have a natural gas distribution concession, being therefore applicable only in the regions of Arequipa, Moquegua and Tacna whose concession is managed by Petroperu and in the new geographic areas where massification projects are developed through special orders to state companies or concessions to the private sector," they add.

      Likewise, the Minem points out that one of the problems in the distribution concessions that operate in the regions in the interior of the country (Ancash, Cajamarca, La Libertad, Lambayeque, Ica, Arequipa, Moquegua and Tacna) is the low demand for natural gas in the vehicle (NGV) and industrial sectors, due, among other factors, to the lack of competitiveness of the final price of natural gas compared to the concession of the Lima and Callao region. This situation limits the increase of investments in infrastructure investments in the natural gas distribution service by pipeline network for the benefit of residential users.

      The law also excludes independent users that have a natural gas supply contract, so this type of user will not be compensated.

      "It is contemplated that the benefit of the compensation mechanism applies to all users of the natural gas distribution service nationwide, it should be noted that this mechanism does not include independent users who have supply and / or transportation contracts with the Producer and / or Transporter, as appropriate. Likewise, the aforementioned PL 679 established as efficiency criteria that the compensation mechanism must recognize efficient costs incurred by the distribution concessionaire to attend the regulated market, the costs of the users based on the volume consumed and not the contracted capacity of these with the concessionaire; as well as not affecting the competitiveness with respect to the substitute energy", indicates the document sent to the General Secretariat.

      Due to the form of compensation proposed by the enactment of the Law, when developing gas infrastructure in Apurimac, Cusco, Huancavelica, Puno and Ucayali, 159,638 and 97,954 households of the medium-high and high socioeconomic strata of the mentioned regions could be excluded from this benefit.

      The DGH points out that it has been identified that, as a result of the mentioned differences, there are very different final prices of natural gas throughout the national territory, creating inequality and a potential disincentive to consumption by end users located in the regions of those concessions that offer higher prices compared to Lima and Callao and Ica where, in addition , prices are lower product of greater development or maturity of the market.

      "A similar scenario will occur when infrastructure is developed in the regions of Ayacucho, Apurimac, Cusco, Huancavelica, Junin, Puno and Ucayali. Likewise, according to the provisions of the Autograph, this compensation mechanism will only be granted to residential users included in the Household Targeting System (SISFOH), which could exclude 159, 638 and 97,954 households of the medium-high and high socioeconomic strata of the mentioned regions", it refers.

      The requests

      In the Minem's document, which will have to be evaluated by the Executive, the DGH of the Minem requests the withdrawal of the Final Complementary Provision that sets a 180-day term to call for bids for natural gas massification projects, since according to previous Fonafe regulations (to entrust a State company) or by APP (for concessions) it is not applicable.

      The DGH points out that it is necessary and indispensable to exclude the third DCF from the autograph, since according to what has been indicated it would not be enforceable within the framework of the approved law.

      Likewise, it is necessary that the Minem, as the governing body of the hydrocarbons subsector that directs the national energy policy, has a majority in the Steering Committee for the Administration of the FISE, in order to continue with the agile implementation of the programs implemented and to be implemented.


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