February electricity crisis will raise CFE rates

In domestic customers it will reach 3.3%. Photo: (El Economista)

The impact on the cost of generation for April was a reflection of the costs of natural gas in Texas during February when the price of the MBTU went from 3.5 to 450 dollars on average, the state company explained.

April 13, 2021.- All the electricity rates of the Federal Electricity Commission (CFE) will increase from the month of April, when the extra cost paid for natural gas for generation in February will begin to be reflected, after the climatic contingency that increased by more than 200% the price of this fuel for a few days. Although there will be lower increases according to the rate, which for domestic users will reach 3.3% per year, the state utility will have to adjust these charges after the loss it has assumed, explained José Martín Mendoza Hernández, director of CFE Supplied Services Basic. 

“In February, there was an over-cost that was generated to the CFE of about 50,000 million pesos, which are being worked with the Regulatory Commission and the Ministry of Finance to dose or transfer them in the months in which the rate has a decrease ”, detailed the official. 

During his participation in the presidential morning conference, the official explained that there are a total of 48 million clients that CFE has, of which 40.7 are domestic service but only represent 30% of the company’s sales. 

Upon reaching April, the basic consumption of the first 75 kilowatts for domestic users was set at 0.861 pesos per kilowatt-hour, which had an increase of 2.9% compared to the same month of the previous year.

It should be remembered that, according to data from the CFE, between 2019 and 2020 the increase was 4%, which was the second-highest in this decade, which had annual average increases of 1.9% in this line, although in 2017 and 2018 there were no annual increases and even in 2016 this rate dropped 2 percent. 

Thus, this rate has increased by 20% in 10 years, in the comparison between April 2021 and the same month of 2011, in addition to that it has increased 6.9% in the current administration, between April of this year and the same month of 2019.

But it should be remembered that in April of last year an agreement was established that all excess consumption to migrate to the high consumption rate will be frozen so that there were no customers who due to staying at home due to the pandemic and consuming more, would change their rate of subsidized to high domestic consumption (DAC). Even, detailed the official of the state electricity company, there are currently 250,000 clients in the DAC rate, in contrast to the 480,000 that there were last year, with which 230 high consumption clients reduced their electricity demand and by using less energy they received a subsidy that they did not have before.  

Within subsidized domestic consumption, only basic demand receives government support, but any surplus is collected in an ordinary way, even during the pandemic. Therefore, those who already within the basic rate increased their energy use by around 20%, will have seen increases of up to 60% in rates, while depending on the region, with increases of more than 40% there are those who have experienced double increases in their receipts, without meaning that they were transferred to the DAC rate.  

“They continue to have proportionally the subsidy block associated with the rate they are in, in their regular consumption, but not in what they are increasing,” he said.

So, domestic rates will increase in 2021 below the inflation of the previous year, through a monthly upward slide of 0.274% accumulating an increase of 3.33% compared to December 2020.

On the other hand, commercial, industrial, and service rates, which are regulated by the Energy Regulatory Commission (CRE) and which last year had a decrease of 6%, as of April they have increased 5.41% in their generation component and capacity. When weighting the rest of the components that make up the rate such as transmission, distribution, and services, the increase is 3.4 percent.  

And for the end of 2021, an annualized increase of 2.5% is expected in this item, below the projected inflation of 4% per year.

Source: El Economista



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