Surprising rise in electricity prices in Colombia

Colombia registers the highest level in water reserves since records have been kept. This, in part, due to the La Niña phenomenon, which has been the protagonists during the last months of the year, which should show an encouraging panorama and improvement in the prices of this service. However, the number continues to rise.

Hydraulic generators have raised their price offers since Friday, December 9, by 155%, from 200 pesos (four US cents) per kWh to 510 pesos (11 US cents) per kWh by December 28.

The biggest concern is that these values ​​could rise to the scarcity prices of 945 pesos (20 US cents) per kWh without any entity regulating these increases, directly affecting end users with rate increases similar to those seen by the increase in Producer Price Index (IPP) in the last year.

Currently the level of the reservoirs in Colombia is at its historical maximum, since since December was recorded, it had never started with so many water reserves, since this month it began with 87.14%, while in the last month of previous years it was located at 79.05 percent.

The Ideam estimated that the passage of La Niña through the Caribbean, Pacific and Andean regions, between November and December, would be reflected with rains of 35% and up to 40% heavier than normal. But the projection had to be adjusted and in fact the rainfall was even higher.

After this strong rainy season, the Institute of Hydrology, Meteorology and Environmental Studies projects a new increase in rainfall that could last until March 2023, in what would be a second rainy season.

This panorama would render the efforts of the National Government and the distribution companies in the Agreement for Tariff Justice fruitless, in which the objective was to mitigate the rise in prices that has been impacting the cost of the energy bills that Colombians receive monthly. especially on the Caribbean coast.

For this reason, the actors in the sector have called for the Comptroller’s Office and the Superintendency of Residential Public Services to investigate the reasons for the excessive rise in prices for this service and take corrective measures to protect end users, who would be seriously affected by this whole situation.

Agreement for Tariff Justice

Based on the Government’s proposal, the Pact for Tariff Justice to develop tariff adjustments in the energy sector and thus mitigate the rise in prices that have increased, several companies have voluntarily joined. Initially, Celsia, Isagen, Aes, Urrá, Gecelca, Air-e and Afinia announced that they would join the pact.

On the other hand, ISA’s electric power transmission companies, Isa Intercolombia and Isa Transelca, will also take advantage of the provisions of the Ministry of Mines and Energy and the Energy and Gas Regulation Commission that has the purpose of taking actions against the increase in IPP rates that has been evidenced since 2020.

However, now it remains to be seen what will happen to this pact if prices continue to rise without any control.