The hidden truth in the electric bill – Energy Magazine

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When looking at the electric bill, we always look at the kilowatts consumed and do not understand the collection of other associated charges, which increase the final amount to be paid. The time has come to unravel them.

By Marina Parisi, Energy Magazine

Santiago de Chile.- How much and to whom do free customers in Chile pay for their electricity consumption? According to Eduardo Andrade, Executive Secretary of the Chilean Association of Energy Traders (ACEN), “if a random sample of a couple of free customers is taken, the Energy and Power items represent 51.9% of the total ballot”.

But here the problems begin: the National Energy Commission (CNE) assures that Energy and Power are equivalent to 75% of all charges.

Similarly, the ACEN spokesperson details that “the Transmission Charge represents 14.3% of the total invoiced, while the Distribution Charges correspond to 31.3% and the System Charges to 2.5%”.

In contrast, the CNE states that “the Transmission Charge is equivalent to 11%; Other Charges (for technical and reactive minimums, among others) 10%; Complementary Services 2%; and Public Service Charge 2%”.

Given the evident lack of consensus among these actors, Patricio Molina, Manager of the National Federation of Electric Cooperatives (FENACOPEL), jumps on the scene to clarify that “today the free customer negotiates directly with the generator the costs associated with the purchase of energy and power, also paying its transportation and other charges.”

Is the calculation correct?

Since we do not know exactly how much we pay for each “Charge”, the natural doubt arises as to whether these charges are well calculated.

In Andrade’s opinion, “more than knowing if they are well quantified or not, the important thing is to ensure the need for these positions. One wonders if the budget of the National Electrical Coordinator (which operates the electrical system), which in turn is reviewed and approved by the CNE, is well prepared or if the end users (those who pay for it) may have an opinion”.

“The same thing happens in the case of complementary services or in the Stabilized Price Charge”, graphs the ACEN spokesman. “The latter represents, most of the time, a subsidy from end users to small-scale generation plants.”

Finally, “the charges related to tolls (national, zonal or distribution) also imply a significant outlay, where the majority of end users have no ability to interact in the genesis of said charges.”

“The more complex the markets are, such as that of complementary services, the less competition there is. Curiously, it is in these markets where the most increases have been registered in recent times”, concludes Andrade.

The weight of the Electrical Coordinator in the final client

Molina’s vision is different, asserting that the conditions should not exist to make calculation errors. “The Transmission Charges (CTx), the Public Service Charge (CSP) and the Distribution Tolls, are regulated and determined from the application of Exempt Resolutions of the CNE and the Tariff Decree (toll)”.

Right at this point, the CNE raises its hand to explain that “the National Electrical Coordinator was introduced in Law 20,936 (2016), assuming the tasks of coordinating the operation of the electrical system, among other related functions.”

“With the modification of the nature of the Coordinator and its independence, its financing became the direct responsibility of all the clients of the system. Previously, the costs were absorbed by the companies and represented in the negotiations with their clients”.

It is worth asking: why were companies released from this cost and transferred it to the final customer?

The little ones without being able to negotiate

The CNE makes an effort to emphasize that “final payments depend on the consumption of each client, with mining (given its nature of higher energy consumption) paying the highest amounts, compared to residential clients.”

Molina reinforces this last explanation of the authority, asserting that “large customers with high consumption of kilowatts/hour will pay a significant amount for the Public Service Charge (CSP). Meanwhile, customers with low consumption will pay much lower amounts for CSP”.

But for Andrade the central theme here is another. “Large customers, either directly or through associations that group them, have the means to convey their opinion to the various actors in charge of investment decisions (National Electricity Coordinator, National Energy Commission and Panel of Experts)” .

“On the other hand, small and medium users do not have the resources for it. Therefore, they are left out of the investment decisions that they will ultimately have to bear.”

Balancing the scales

How is this imbalance resolved where the big ones can give their opinion and the small ones are left out?

“Obviously, it is desirable that all those involved have the opportunity to provide their observations on the charges that are applied to them,” indicates Molina, “from end customers to companies that provide generation, transmission and distribution services, in addition to entities who manage and regulate the system.

Andrade, for his part, is more emphatic. “It is necessary to empower those who represent end users, and ideally, provide public financing, so that they can be a valid counterpart in all studies and definitions that imply costs for them.”

While the CNE declares that “the charge to end customers, whether free or regulated, responds to the provisions of the current regulation.”

“To modify the nature of the charge, a legal change must be made, which requires an exhaustive analysis by the National Energy Commission, the Ministry of Energy and all the protagonists of the electrical system.”

It wouldn’t be a bad idea.

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