Users' Assembly: electricity and natural gas unions react to the situation

Six of the most important guilds of the electricity and natural gas sectors in Colombia made a joint statement yesterday in response to some of the points made during the recent Assembly of Energy Users held in Santa Marta and convened by the Ministry of Mines and Energy and the Superintendence of Public Utilities. (Read here: The solutions proposed by Minminas to high energy rates in the Caribbean).





Today, thanks to the Public Services Law, there are public, private and mixed property companies that have allowed the Government to fulfill its obligation to guarantee the provision of public services, with convincing results in terms of improved coverage, reliability and quality":

Communiqué of guilds of the electricity and natural gas sector.

In a communiqué signed by Andesco, Acolgen, Andeg, Asocodis, Naturgas and SerColombia, these unions clarified five basic points:

1- Stigmatization of the private sector: they reject the stigmatization of the companies that provide public services, especially those in the private sector, and highlight improvements in coverage, reliability and quality of service.

2- Use of subsidy resources: in this sense, they specify that the service providers do not keep the subsidy money.

3- Modification of the public utilities law: they are aware of the need to update it, without losing what has been achieved.

4- Tariff formula and invoice: it is not correct to state that the invoices have a trap or that the regulation has been made behind the people's backs.

5- Solar roofs and energy communities: they qualify these strategies as adequate and support their regulation, development and implementation.

This is the full text of the communiqué issued by the six associations mentioned above:

COMMUNIQUÉ ON ENERGY USERS' ASSEMBLY

Bogotá, September 21, 2023. Considering the Users' Assembly convened and held by the Ministry of Mines and Energy and the Superintendency of Residential Public Utilities in the city of Santa Marta, we, from the unions of the electricity and natural gas sector, respectfully allow ourselves to differ from several of the statements made in this space and share some clarifications:

We clearly understand the enormous challenges of the current situation, we know that it demands changes, and like the Government of President Gustavo Petro, we understand that everyone, including public and private sector actors, must be agents of change, building on what has been built. Since the beginning of this Government, as representatives of the sector, we have been willing to dialogue with the Ministry of Mines and Energy, initially with former Minister Irene Vélez, and today with Minister Omar Andrés Camacho.

In this sense, we understand and welcome the Government's rapprochement with social organizations, as they are essential to build a consensus for a better country, but such rapprochement must be based on arguments and true facts, and not be used to destroy what is already advanced and/or to justify changes based on unsubstantiated assertions.

We call for true conciliation, respect for all parties and depoliticization of issues of high technical, economic, social and legal complexity, even more so in the electoral period the country is going through.

Although there are things to improve, the emphasis should be on the cause instead of the symptom; the focus should be on improving the conditions of the population, and generating new jobs so that citizens have the ability to pay for their services and needs, or failing that, on raising more resources to support users with the payment of their bills, without compromising the reliability and efficiency in the provision of public services. As industry associations, we are willing to share visions in order to continue building and advancing towards the Colombia we all want, together with the Government, users and social sectors.





On the contrary, they apply it to the users through the invoices immediately and then the Government pays them, through procedures that guarantee the verification of the performance of the agents; such payments, in most cases, take longer than they should; in fact, today the companies are owed for this concept amounts that date back to the second quarter of the year":

Communiqué guilds of the electricity and natural gas sector.

Regarding the specific issues discussed we consider:

1. Stigmatization of the private sector: We reject the stigmatization of the companies that provide public services, especially the private sector. It is worth remembering that before 1994 the State did not have the capacity to provide public services with reliability and quality, among others, to the point of suffering a blackout and committing 30% of the country's foreign debt in the construction of electricity infrastructure. Likewise, it has been demonstrated that most of the companies that were in charge of local governments suffered from corruption that prevented investment and service improvement. Today, thanks to the Public Services Law, there are public, private and mixed ownership companies that have allowed the Government to fulfill its obligation to guarantee the provision of public services, with convincing results in terms of improved coverage, reliability and quality. It is completely legitimate and reasonable that the companies receive incentives and retribution for this, given the high investments and risks imposed by this sector. To pretend otherwise would be regressive and would lead us to situations similar to those experienced in the 90s.

In the face of the statements of not counting on the companies in the discussions that concern the sector, we respond by offering our willingness, knowledge, capacity and effort for the joint development of improvement proposals that benefit the country, as we have done historically, including in the present government, in initiatives such as the pact for tariff justice, the energy communities and the just energy transition.

2. Use of subsidy resources: It is a State policy to support the most vulnerable users in the payment of public services. Part of this support is covered with the contributions paid by users of strata 5 and 6, commercial and industrial and the remaining deficit, approximately $5 billion per year, must be covered with resources from the National General Budget. On the contrary, they apply it to the users through the invoices immediately and then the Government pays them, through procedures that guarantee the verification of the performance of the agents; such payments, in most cases, take longer than they should; in fact, today the companies are owed for this concept amounts that date back to the second quarter of the year.

3. Amendments to the Public Utilities Law: As we have said before, Law 142 of 1994 has made it possible to have more and better public utilities, and a solid institutional framework with technical and independent functions for policy making, planning, regulation and monitoring by the State. Although this Law needs to be updated, care must be taken not to lose what has been achieved, building on what has been built. We are willing to

We are willing to accompany this effort, as we have repeatedly indicated in different spaces.

4. Rate formula and invoice: It is not correct to state that the invoices have a trap, or that the regulation has been made behind the people's backs. The country and the government should know that the energy service charge results from the application of a tariff formula that seeks to recognize the cost of providing the service, periodically updating the market variables. The tariff option was an aid provided to users during the pandemic to alleviate the impact of bills in times of low income due to household isolation, allowing them to pay in a longer term. We have already submitted proposals in this regard, including that the government should provide direct resources and sufficient funding to support users, instead of blaming the companies for applying a measure that, far from representing income for them, has reduced their cash flow and compromised their sufficiency.

5. Solar roofs and energy communities: These strategies are appropriate and we have been supporting and working on their regulation, development and implementation. It is important to indicate to the users the mechanisms and resources that will be used to advance in this line, the allocation criteria and the guarantees of continuity and service provision for all citizens.

We wish to ratify that all users are and will continue to be at the center of the management of the companies, who make their greatest effort to provide increasingly better services at the lowest possible cost. If there is evidence of bad behavior on the part of these companies, we invite you to file the corresponding complaints before the pertinent authorities and that these, in law, exercise their functions in this matter. As long as there is no such evidence, we believe that unsubstantiated statements tend to undermine confidence in public and private institutions, which is not desirable in a market where such value is essential to ensure reliable and efficient supply, now and in the future. (Read here: Comptroller's Office puts the magnifying glass on the increase of electricity rates in the Caribbean).