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Electricity bills would rise starting in July: the tight deadlines for the electricity subsidy to be applied along with a new rate increase

Just last Tuesday, April 30, the bill that will unfreeze the electricity rate in Chile was published in the Official Gazette. This is a key initiative for household budgets, since for a large number of them this means that the monthly payment of electricity bills will increase. Although not for everyone.

The application of the new regulatory framework will require the government to publish the tariff decree for the first half of this year. For this, the law gives a maximum period of 45 days, counted from its publication. Thus, the Executive has until June 25 to comply with the legal mandate. Before, the National Energy Commission (CNE) must have published its preliminary technical report during the first 15 days, which will be subject to review by the companies for another five, so that the final report is then issued within the next 15 days. days.

All of the above will allow the Ministry of Energy to issue the corresponding decree, setting the new electricity rate prices. Given that its application is usually immediate, the highest rates would begin to apply during July, considering that the billing period of the distribution companies occurs within the first days of the month.

In parallel, the government’s efforts will be focused on implementing the two measures that will allow the increases to be contained, and even reverse them in some cases, in the lower-income segments of the population.

The first of them is the electricity subsidy, created under the same law, and which will be concentrated in nearly one million households classified as vulnerable, corresponding to the 40% with the lowest income in the Social Household Registry.

Added to this is that a total of six communes in the country, Tocopilla, Mejillones, Huasco, Puchuncaví, Quintero and Coronel, will benefit from a 40% reduction in the price of the energy component. This group of communes was classified as an energy transition zone by the Council of Ministers for Sustainability and Climate Change last Friday. “This discount will imply an approximate reduction of between 20% and 30% – depending on the commune and the update of the tariff decrees – in the final account of regulated clients of said communes and will be applied automatically starting in the second half of 2024. ″Energy Minister Diego Pardow said in a statement.

Actors in the electricity sector maintain that if prices are adjusted in July, the times for the subsidy to be ready to be applied are tight, so they warn that “there will probably be a month” in which the benefit will not be applied jointly. to the rate increase, and that “the subsidy discount will occur later.”

The electricity subsidy and the regulations that will make the benefit operational for lower-income households appear to be the main challenges for the Executive in this area. Although it has not yet been issued, the Ministry of Energy has been working on it, even before the approval of the bill. Although progress is already made, the document is expected to be ready at the end of May, and then sent to the Comptroller’s Office. Said body will be right, within the framework of mandatory control that every administrative act must overcome to ensure its correct legal application. However, the Comptroller’s Office does not have a legal deadline for this, adding a greater amount of uncertainty regarding when the subsidy can be applied.

The fine work they are working on in the Executive involves defining the order of priority to apply the benefit, complying with the usual selection criteria for this type of policy, such as having people under care or a caregiver, as well as such as the presence of older adults in each home.

The Ministry of Social Development is also involved in this work, the portfolio in charge of keeping the Social Registry of Households updated. And, as is the case with many state benefits, households must apply to receive the subsidy. As it is a new one, a key aspect in its operation is the exchange of information between those who opt for the benefit, and those clients who have current debt, since the latter will not be able to receive the subsidy if they have not regularized their situation.

Both stages, the application and the exchange of information, will have their respective times. Although these are still unknown, it is estimated that at least a month is required for the first, a period that must also include the information campaign so that the benefit is communicated to potential recipients of the subsidy.

When consulted, the Ministry of Energy emphasized that “the implementation of the rate stabilization law will be carried out within the deadlines stipulated in the transitional articles” and assured that the process of issuing the rate decree by the CNE “is in March”.

Meanwhile, Minister Pardow commented that the work on drafting the regulation “will define the scope and deadlines for the application process and assignment of the benefit to more than 1 million vulnerable households, so that the delivery of the subsidy becomes effective. during the second half of this year, covering the variations in the accounts that are registered in said period.”

However, if the subsidy is not ready in July, this will not imply the loss of the benefit, so it is not ruled out that payments will be retroactive in that month in the event of such an eventuality.

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