The announcement was made by the Vice Minister of Electricity and Alternative Energies, Hortensia Jiménez, also explaining the scope of the nationalization of the energy distributors in La Paz and Oruro, subsidiaries of the Spanish company Iberdrola.
The government sets a six-month deadline to lower electricity rates in the rural area of La Paz. In the case of Oruro, the process is complex since conversations have to begin with the 146 companies in charge of distributing this service in rural areas.
The announcement was made by the Vice Minister of Electricity and Alternative Energies, Hortensia Jiménez, during an interview on the Hola País program on the Pat network, in which she explained the scope of the nationalization of the energy distributors in La Paz and Oruro, subsidiaries of the Spanish Iberdrola.
“We are going to work together to identify the 146 (Oruro distribution companies) and be able to start the required conversations, we hope it will not be long (...). In the case of La Paz, we hope to be able to level the rates in the first semester” of 2013, he anticipated.
On Saturday, President Evo Morales promulgated Decree 1448 of nationalization of the distributors Electricidad de La Paz SA (Electropaz), Empresa de Luz y Fuerza Eléctrica de Oruro SA (Elfeosa), in addition to the Bolivian Business Administration Company (Cadeb) and the Electrical Services Company (Edeser).
The interim general manager of Electropaz and Elfeosa, René Ustáriz, explained that “the 146 small companies” of Oruro buy energy “wholesale” from this firm and distribute it to the rural area.
Ustáriz clarified that these 146 companies will not be affected by the nationalization because they will also be able to buy wholesale electricity from the National Electricity Company (ENDE), which has been in charge of Elfeosa since Saturday.
Currently, the rate charged for electricity consumption in the city of La Paz is Bs 0.63 (US$0.00015) per kilowatt hour (kwh) and the supply is provided by Electropaz. In the rural area the payment amounts to Bs 1.59 per kwh and the La Paz Rural Electricity Company (Emprelpaz) is in charge.
In Oruro the electricity service rate in the urban area is Bs 0.69 per kwh and in the rural area Bs 1.59 (US$0.00037). The Minister of Hydrocarbons and Energy, Juan José Sosa, reported on Sunday that as the La Paz Electricity Company (Emprelpaz) was bankrupt due to some irregularities, the rates could not be leveled, which is why it was intervened in order to know what your current financial situation is.
Once the results of the intervention are available, Sosa anticipated that ENDE will take over Emprelpaz but will continue to distribute electricity to the rural area.
The difference that exists between the rates of the rural area with the urban area in the department of La Paz will be covered with 15% of Electropaz's profits, Sosa added on Sunday. The Vice Minister of Electricity and Alternative Energies said that in the urban area of La Paz there are more than 400 thousand users, while in the rural area 90 thousand, and they are the ones who should be reached with low rates.
The Minister of Hydrocarbons and Energy indicated on Sunday that he hopes to have a “cordial” meeting this week with Iberdrola executives to begin discussing the economic compensation that will be given for the expropriation.
The measure has been supported by sectors loyal to the government and criticized by businessmen and opponents.
Investment, energy and utilities. Delay. The Minister of Hydrocarbons and Energy, Juan José Sosa, reported that Electropaz and Elfeosa did not comply with the investment plans that they had to carry out in 2011 regarding the laying of high voltage lines to expand and improve the electricity service.
Rates. The Vice Minister of Electricity and Alternative Energies, Hortensia Jiménez, guaranteed that the rates in the urban areas of La Paz and Oruro “will remain unchanged”, so there is no reason for people to worry.
Vice Minister Jiménez justifies expropriation. EFE. The government justified the expropriation of the subsidiaries of the Spanish company Iberdrola in Bolivia with the argument that the firm did not want to expand the distribution of electricity to the rural areas of the regions of La Paz and Oruro, nor to equalize the rates of those areas with the of cities.
In an interview with Erbol radio, the Vice Minister of Electricity and Alternative Energies, Hortensia Jiménez, confirmed that the Executive asked Iberdrola to expand its operations to the rural areas of La Paz and Oruro to lower the cost of services in the field. , but the firm did not give them a “definitive answer.”
“They did not see a solution of this type as possible, they did not demonstrate it directly (...). There was an approach in which the State presented the need to them, there was no concrete response that would allow them to take over the rural electrical systems and the decision was made,” said Jiménez, according to the report from the EFE agency.
The measure was announced by surprise on Saturday by President Evo Morales, who presented a decree that expropriates Iberdrola's shares in the main electricity distributors of La Paz, Electropaz, and Oruro, Elfeosa, in the services company Edeser and in a investment manager.
The new expropriation aims to balance electricity rates between urban and rural areas of both regions, since while in the cities the average cost is Bs 0.63 per kilowatt/hour, in the countryside it rises to Bs 1.59.
Jiménez maintained that Iberdrola subsidiaries “never had the decision or the will to enter the rural area to provide their service,” which caused small service cooperatives to emerge that distribute electricity.
