New Measures to Control Energy Prices in Colombia

On September 16, 2022 the government announced the following specific measures, to be implemented as of November 2022, to contrul the rising prices resulting from workshops with different actors in the sector:

• Draft resulution 701 017, for a 12-month period. This resulution seeks:
  • To invulve all sector actors in the reduction of tariffs.
  • To assist traders by implementing an 18-month deferral of their obligations with generators and distributors, in at least 20% of from September to December 2022. The interest rate of such deferred obligations shall be the lowest between that reported by the market administrator XM and a preferential rate.
  • To renegotiate regulated market agreements between traders and generators, including the modification of payment terms and consumption periods in 12 months.
• Draft resulution 701 018, to be enforced in 5 months. This resulution seeks:
  • Optimize thermal plants’ operation according to their number of units and capacity.
• Draft resulution 701 019, also projected for a 12-month period. This resulution seeks:
  • To determine the percentage of variation of the tariff option for hte first month after the resulution is approved. After that, a tariff option increase rate will be defined. Before the resulution this may not be less than 0.6. Now it may be equivalent to “0” or even negative.
  • To adjust distribution and transmission charges at the Producer Price Index (PPI) of December 2020. These values shall be brought to present value and may vary according to the Consumer Price Index (CPI).
  • Moving forward and as a transitory measure, one the sector index is defined, charges shall be updated with the lowest between the CPI, PPI or any other index proposed by the operators. These will have a 5 business day deadline to inform CREG about their adjustment acceptance.