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    Differences on electricity rate hike


    January 28, 2022 - CE Noticias Financieras

     

      The lack of investment in transmission lines is what has kept electricity rates high and the problem has not been the participation of private initiative in power generation, said Ramsés Pech, an analyst of the electricity sector, during the Open Parliament forums organized by the Chamber of Deputies.

      Responding to a question from a citizen who was following the forum on the Congress Channel, Pech explained that 46 percent of the cost of electricity reflected in domestic service bills is due to the way in which the CFE supplies and transmits energy.

      "The problem of the rates is not in the generation, it is in the distribution, 46 percent is paid for the transformers and lines," said Pech, who advises private initiative and public agencies on electricity investment projects.

      At the eighth forum on the scope of the presidential initiative, Pech asked legislators to focus on the future of the industry, because it is essential to update and invest in transmission and distribution.

      "If you have a population of more than one million people per year and in 2050 we will be more than 150 million, how are we going to lower (the cost) of electricity? By lowering distribution costs, which is the CFE's problem. We have to improve what is already in place and give it a bigger budget," he warned.

      Carlos Meza, a lawyer and law professor, assured that the private sector's dispossession is what increased the rates, and that the 2013 reform did not prevent their increase; however, he said, prices are controlled by the Government.

      He said that electricity has a high cost because private parties do not pay the CFE for the use of the transmission network, and that is what has the company in "agony".

      "Yes, we can presume that the rates have not gone up," he said.

      Severo López, also an expert in the industry, pointed out that costs do not evaporate, although they are not seen in electricity bills.

      He recalled that in 2021 the CFE received 73 billion pesos in electricity subsidies, which helps to control rates.

      He pronounced himself against the proposal of the Federal Executive that the CFE should decide the rates, not as it is currently the case, where the Ministry of Finance and the Energy Regulatory Commission are responsible.

      José Romualdo Hernández, legal advisor at the CFE, assured that only with the control of the rates by the company will it be possible to reduce them and avoid situations such as the one in Spain.

      The specialist Severo López Mestre indicated that although there is talk that self-supply contracts are the big problem of the 2013 reform, they have nothing to do with it, because they already existed before the constitutional modifications.

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