Edenor Will Invest Usd 1.275 Billion in the Amba to Improve the Electric Service

The electricity distributor Edenor announced a USD 1.275 billion investment plan for the next five years in the Buenos Aires Metropolitan Area (AMBA).

The company expects that the public hearing this Thursday, in which the Government will define new increases, will allow for a rate adjustment in the framework of the Five-Year Rate Review Process (RQT).

Investment plans and service improvements

Edenor's investment plan includes the construction of three new electrical substations in Hurlingham, the northern corridor, and General Rodríguez, with an estimated cost of between 60 and 80 million dollars each.

Additionally, the company plans to develop an unprecedented energy storage system in the country, aiming to install batteries that can inject electricity into the system in case of shortages. This would prevent power outages in the AMBA, where about 40% of the national electricity consumption is concentrated. The estimated investment in this initiative amounts to USD 500 million.

Edenor will participate in the tender recently called by the Government for this project, in which it expects to add around 270 MW of capacity by 2027.

Impact of the rate adjustment

Despite the rate freeze in recent years, Edenor assured that it maintained an average of USD 200 million annually in investments, which represents approximately 50% of its income. However, the company warned that without a rate update, it would continue to accumulate debts with CAMMESA (the wholesale electricity market).

Meanwhile, Edesur, controlled by the Italian multinational Enel, announced an investment plan of USD 875 million in the same period.

In addition to the distributors, the rate adjustment process also involves electricity transmission companies, such as Transener, TIBA, Yacylec, LITSA, LIMSA, INTESAR, Interandes, Transportel Minera 2, Enecor, EDERSA, and TRANSACUE.

New increases and elimination of the lighting fee

In January, electricity rates in the AMBA increased by an average of 247%, according to data from the Interdisciplinary Institute of Political Economy (UBA-CONICET). This increase replied to the reduction of subsidies in the cost of energy and the update of distribution and transportation values, which represent a key part of the final bill.

The new rate schedule will be published on March 31 and will take effect on April 1. According to reports, the increases in distribution and transportation costs should not exceed 10% for users. Additionally, a monthly rate update based on inflation is contemplated.

On the other hand, in the next 60 days, Edenor will stop including the municipal lighting fee in its bills, following a court ruling that determined it was a charge unrelated to the electricity service. Municipalities will have to find new ways to replace this income.

Future of subsidies

The Government seeks to move toward a more focused subsidy scheme, although its implementation could be delayed until mid-2025.

Currently, state subsidies are allocated according to household income levels in relation to the Total Basic Basket (CBT) of INDEC. There are three categories of users:

• Level 1 (high income): no subsidies.
• Level 2 (low income): maintain discounts.
• Level 3 (middle income): receive partial assistance.

Meanwhile, companies in the sector continue to adjust their rate proposals based on the current subsidy segmentation.

Population's perception of the increases

A survey by Casa Tres conducted in January revealed that 44% of Argentines prefer to keep rates frozen despite the risk of power outages.

Regarding responsibility for problems in the electricity service, respondents pointed to:

• 38% to distribution companies.
• 34% to the current Government.
• 23% to Kirchnerism.