The critical legacy of electricity and gas services that Milei will face

Beyond the reprivatization of YPF Once it is restructured, which he proposed among his first definitions, the president-elect, Javier Milei, is set to face a complex legacy of electrical and gas issues that will require him to adopt in the initial stretch of his administration a package of substantive measures to be able to resolve pending problems.

In the electricity sector, one of the priorities that must be addressed with some urgency in the “Distribution” area is the normalization of the Edenor and Edesur concession contracts. through the completion of the delayed “Comprehensive Tariff Reviews” (RTI) that Alberto Fernández’s administration promised several times, but never put into action.

Updating contracts with construction plans for the next five years that the RTI contemplate would occur in the middle of the critical supply period that is approaching for the summer months, when the failures and supply cuts promise to return with intensity due to the scarce investments to improve the services made by the two metropolitan distributors that depend on of the national government.

Added to this fact are two more issues that could also complicate the normal electricity supply. On the one hand, there would be the review of the 96-month payment agreements that the current energy authorities agreed with Edenor and Edesur for the million-dollar debt they had accumulated with the Wholesale Electricity Market Administration Company (Cammesa). Milei’s energy representatives have already warned that they want to recalculate what is owed, shorten the cancellation time and sign new payment agreements with the intervention of the Treasury Attorney General’s Office..

The other issue in focus is that linked to the sale of Edesurwhich the Italian controlling group ENEL has already decided on and which has only been postponed until the new government takes office.

With regard to the “Generation” sector, the list of points to be put on track that the new officials will have includes the awarding of the new thermal power plant contracts that were put out to tender in recent months, the adaptation of the renewable projects that were not enabled within the planned times and the operation of the Comahue hydroelectric plants, whose concession contracts came to an end and were extended by the current Government until the first January days.

In terms of electric “Transport”, a new automatic fare adjustment mechanism is underway

In this case, The intention of the Milei energy team would be to extend the presence of the current private concessionaires for a period of one year and then move forward with a new privatization scheme.

Electric transport: new fare adjustment mechanism

In matters of Electric “transport”the RTIs of Transener and the regional transporters are also pending completion, although in this case the outgoing management has already left a process in progress. new automatic rate adjustment mechanism due to recognition of higher operating costs that has alleviated the situation of companies and leaves a greater margin of time to be able to renegotiate contracts.

On the other hand, what the new administration must define as soon as possible is how and with what resources the priority works of expansion of networks and lines to guarantee supply in the most critical areas of the country where transportation facilities are operating at the limit of their technical capacities.

On the gas sector side, both the distributors and the transporters have the RTI braked. Although this year’s rate increases that improved their specific income still allow them to stay afloat, all companies have already warned that they need to update their collections and redefine work plans before the second quarter of next year.

Works in Vaca Muerta

As regards the works of expansion of the gas pipeline networkthe current leadership of the state-owned Enarsa headed by Santa Cruz native K, Agustín Gerez, has two relevant actions pending that should have already been defined and whose delays only aggravate the agenda of hot topics that will pass into the hands of the new officials.

One of these points is the awarding of the reversal works of the Northern Gas Pipeline that will allow the imported gas that Bolivia stops sending to be replaced by the local production of Dead cow.

In Vaca Muerta the expansion of the gas pipeline network will continue

In the bidding fight, the consortium made up of Techint and SACDE – the construction company of Marcelo Mindlin and the main executives of Pampa Energía – presented the lowest offer for the detailed engineering and reconversion works of the gas pipeline. The initial offer amounted to $146,996 million with an additional discount of 3.80% that lowered the final price to $141,410 million. In second place was the BTU proposal of $183,384 million.

The problem that arose is that the lowest offer has been above the official reference budget and now Enarsa officials do not want to sign the award for fear of being sued after December 10.

The other burning issue is related to the atypical call for bids launched by Enarsa for the purchase of the pipes and pipes of the second stage of President Néstor Kirchner Gas Pipeline (GPNK) that will link Salliqueló (Buenos Aires) with San Jerónimo (Santa Fe).

Unlike what happened with the pipes of the first stage ofTrayen-Salliqueló, which were acquired with budgetary resources, now interested companies must present their offers with financing proposalsa condition that limits the list of possible suppliers and leaves open the final price that the State will end up paying.

Although the receipt of offers was scheduled for December 1, it is most likely that this date will be postponed due to the risk of no bidders appearing or proposals appearing with inconvenient financing. In that case, the ball will pass to the next management who must take care of the problem.

NEXT Here’s why the BEN share price is in focus right now