Decree No. 55/2023 — Declaration of Emergency in the National Energy Sector
Power Department Report | Decree No. 55/2023 — Declaration of Emergency in the National Energy Sector
Through the Urgency and Necessity Decree No. 55/2023 (“the Decree”), published in the Official Gazette today, the National Executive Power has declared a state of emergency in the National Energy Sector, specifically in the segments of generation, transportation, and distribution of electrical energy under federal jurisdiction, as well as in the transportation and distribution of natural gas. This declaration is effective until 31/12/2024.
The Decree instructs the National Energy Secretary to develop, implement, and enforce price sanction mechanisms under conditions of competition and free access. These mechanisms are intended to maintain, in real terms, income levels and cover investment needs to ensure the continuous provision of public services for the transportation and distribution of electrical energy and natural gas.
Furthermore, the initiation of the tariff review process for providers of public services in the transportation and distribution of electrical energy and natural gas has been determined, with the proviso that the effective date of resulting tariff schedules shall not exceed 31/12/2024. This decision takes into account the delays in the renegotiation process mandated by current legislation, which has yet to be completed. It is also noted that during the validity of emergency laws, many provisions in the regulatory frameworks for Gas and Electricity at the federal level were only partially fulfilled, resulting in the absence of an efficient and rational tariff scheme for energy consumption across different segments and user types. This situation is characterized by the increasing obsolescence of the assets of service providers, insufficient adaptation to the needs of current and future demand, and the exacerbation of issues arising from the lack of renewal and expansion of networks.
Additionally, the Decree orders the intervention of the National Electricity Regulatory Entity (“ENRE”) and the National Gas Regulatory Entity (“ENARGAS”) from 01/01/2024 until the appointment of new board members. For this purpose, the National Energy Secretary has a 180-day period to initiate the selection process for ENARGAS board members and review, redirect, confirm, and/or annul, as appropriate, the ongoing selection process for ENRE board members.
Finally, the Decree invites provinces to coordinate with the National Energy Secretary on emergency actions necessary to ensure the provision of electricity distribution services within their jurisdiction.
We remain available for any additional information you may require.
Sincerely,
José Carlos Cueva