The owner of the Ministry of Industry, Energy and Mining (MIEM), Omar Paganini, referred to the criticisms that the directors of the National Administration of Power Plants and State Transmissions (UTE) made to the decree that recognized private generators of renewable energy unconventional the ability to supply long-term steady power; and he considered that they carry out “terrorism” with the aim of not changing the logic of business and investment in Uruguay.
The MIEM decree that puts private generators of non-conventional renewable energy —such as wind, photovoltaic and biomass— on the stage of electricity supply, especially to promote the market for wholesale energy contracts between privateprovoked adverse reactions from the directors of joint venture by Town meeting and the broad front, Enrique Pees Boz and Fernando Cardona, respectively.
Officials from the state electricity company understand that it is a “privatization decree” and that it is “making the entry of private to power generation” to a market that offers low production prices thanks to UTE’s investment. In short, they consider the initiative promoted by the government to be unfair competition.
According to the lobbying director, in addition, the decree can make UTE lose up to 280 million dollars annually, “which corresponds to the current billing of the 470 large customers who are facilitated the exit” to a private. “The direct consequence: a potential rate increase, compensating for the lower revenues of UTE, of 10% in real terms,” added Pees Boz.
Faced with these criticisms, Minister Paganini considered that the directors “are painting a horror landscape just not to change.”
The government’s defense
“The reaction that joint venture is going to lose all the big clients at once and that is going to be very bad is basically terrorism”, said the head of MIEM, in dialogue with El País. For Paganini, unlike what the directors of the state company postulate, the decree is “an opportunity” for private investment comes to the country and? joint venture “you can focus your investment is where they are most valuable, which is in the distribution and transmission network.”
Regarding the possibility that the government initiative opens for the large consumers of UTE to opt for contracts with private generators, Paganini assured that this cannot happen “overnight”, as long as the wind and photovoltaic solar parks in the country “They are all hired by the UTE, so they should be new parks to develop. That takes time and although they can generate some loss of customers to joint venture in the medium term, at the same time (the state company) will increase its turnover because the demand (for energy) is going to grow as more and more electrification continues. And that is a business that is UTE”, defended.
Likewise, the chief recalled that the company will charge tolls for the use of their networks, even in contracts between a private generator and a consumer, so the hypothetical loss of large customers could not be total either. What there will be, according to Paganini, is a greater competence which will, in turn, improve the electrical system as a whole from higher investments.
Finally, with respect to the potential rise in tariffs for UTE, The minister said that the rates are set by the Executive Power and pointed out that from the MIEM they are “convinced” that “the UTE accounts are going to be healthy” to be able to face the situation of decline of large customers. “There is no reason to say” that rates could go up, “it is a short-term vision which they are having. The eventual flight of customers is not going to be a stampede, it cannot be suddenly, today they would have nowhere to flee, it is a dynamic that is going to be slow, ”he said.
Source: Ambito
