Meanwhile, the state is grappling with over $2.5 trillion in debt from Air-e, a Caribbean electricity distributor under intervention. The government proposes a “temporary charge” on electricity consumption to cover Air-e’s outstanding debts to generators and transmission companies, which would be reflected directly on user bills. This measure, alongside reforms outlining energy reliability charges, awaits regulatory finalization but raises concerns about pass-through to consumers differing by social strata.
Complementing tariff reforms, the government is advancing the Subsidies Energy Focalized (SEF) scheme, unifying subsidy frameworks across electricity, natural gas, and LPG to better target vulnerable households based on income and vulnerability factors. The SEF abolishes segmented subsidy levels, replacing them with a binary subsidized/non-subsidized system and incorporates new registries such as ReSEF.
Legislative proposals aim to democratize the regulatory agency CREG by expanding membership to include academic, union, and user representatives, diversifying decision-making and potentially shifting oversight dynamics. In parallel, demand-side industrial and commercial sectors face proposed increases in energy contributions, triggering concerns over competitiveness amid already high unit energy costs relative to regional peers.
These multilevel reforms coincide with budgetary challenges within the Petro administration, which seeks to finance a $26 trillion fiscal plan and reconcile energy policy goals against fiscal constraints. The tariff reform bill, expected to influence distribution costs, subsidy allocations, and the assumption of accumulated debts, epitomizes the complex balancing act between equity, financial sustainability, and sector competitiveness confronting Colombia’s energy landscape.
This article was curated and published as part of our South American energy market coverage.
