MercoPress. South Atlantic News Agency

Argentine electricity rates hiked in July from 10 to 30%

De Vido, a Minister to befriend

Faced with energy shortages after years of minimum investment, neglected maintenance and frozen rates the Argentine government announced this week electricity hikes to the tune of 10 to 30% for residential customers, the first since 2002.

The increase is effective as of July first and to soften the impact on households, will be progressive depending on consumption levels. The basic consumption for the 10% rate increase starts at a bi-monthly 650 KW and will then scale on until it reaches 30%. Industry and commerce which have suffered previous increases this time will pay an additional 10% as of July first. Federal Planning minister Julio De Vido and considered Argentina's "energy czar" said the new rate will only impact on 24% of consumers. Earlier this week President Cristina Fernandez de Kirchner inaugurated in Salta, to the north of Argentina, a new thermal generating plant under the so called Energy Plus government funded program which is part of the overall effort to increase the supply of electricity. However this has a catch: the "new" electricity from the Energy Plus program must be paid taking into account costs, which means doubling current rates. "The increase for industry and commerce is only 10% in retribution for private sector efforts is saving energy and helping government invest in new plants", said De Vido. This week also the Argentine government following a tripartite agreement (with unions and business organization) announced the minimum monthly wage currently at 980 Argentine pesos (approx. 330 US dollars) would be increased to 1.200 pesos (400 US dollars) as of August first and 1.240 pesos as of December first. The agreement was not signed by a dissident trade union organization, CTA which was demanding 1.550 pesos, approx. 520 US dollars.