Empresas Publicas de Medellín’s board will meet on Friday to discuss whether to freeze household electricity bills, CEO Jorge Andrés Carrillo said.
(Bloomberg) — Empresas Publicas de Medellín’s board will meet on Friday to discuss whether to freeze household electricity bills, CEO Jorge Andrés Carrillo said.
EPM, which is controlled by the city of Medellin, produces 27% of the nation’s electricity, therefore freezing their tariffs would have “an immediate effect” on inflation, Carrillo said in a press conference in Bogotá. “We think we can contribute to its stabilization.”
Colombia’s inflation slowed to 12.82% in April after nearly two years of constant increases that brought it to the highest level since 1999. Energy bills are linked to the producer price index, and are also a key component of the consumption basket, creating a feedback loop whereby a rise in energy costs can cause inflation to jump, which then pushes up energy bills even further.
Earlier this year, Petro’s government issued a decree that would allow him to take over duties of the energy and gas commission, as well as the water and basic sanitation commission, for three months. However, the nation’s Council of State suspended the decree, saying the nation’s president can’t assume those duties.
Medellín’s Mayor and EPM Chairman, Daniel Quintero, has publicly sought approval from Petro seeking to freeze utility bills, pointing to soaring living costs which he said were aggravated by “irrational” rises in household bills.
Fitch Ratings has warned Petro’s “unprecedented action to curb the rising electricity tariffs” could jeopardize the required expansion of the nation’s power generation capacity.
Read more: Medellin Seeks to Freeze Household Bills Charged by Utility EPM
El Niño
After years of delays, EPM saw the first two units of its Hidroituango dam come online late last year. The next two, of a total of eight planned units, are expected to be ready before the end of November, Carrillo said.
“We’re in a period of growing energy consumption and a 90% probability of El Niño happening, we just don’t know how long it will be,” he said. “It’s responsible to save water to be able to withstand a period of drought, in an anticipated manner.”
A shift to El Niño weather pattern may reduce rainfall, and thus cut supplies of water to hydroelectric reservoirs in the later months of the year.
EPM is one of Colombia’s largest companies, with energy, water and waste disposal investments in several countries across the region.
–With assistance from Oscar Medina.
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