Panama: Electricity Rate Reduction on the Table

The government was open to analyzing proposals regarding the current management of the Electricity Transmission Company (Etesa) and the issue of electricity commercialization. Photo: Courtesy

The social groups proposed the nationalization of electricity production and distribution. The government argued that the measure is not feasible.

HAVANA TIMES – Talks continue Friday between the government and social groups in Penonome, Panama, after nationwide protests forced the government to address an 8-point list of demands. Thus far partial agreements have lowered the price of basic foods and gasoline, while better medicine distribution and lower prices are being worked out at a separate table and the 6% budget allotment for Education was promised for 2024.

Point five on the demand list is the price of electricity. Talks on this issue began on Wednesday.

The organizations represented in this dialogue are the Alianza Pueblo Unidos por la Vida, the Alianza Nacional del Pueblo Organizado (Anadepo), groups organized in the Ngäbe Buglé indigenous region and peasant sectors. On Wednesday they presented 17 proposals on the issue of energy, within which is the nationalization of electricity generation companies and the reduction of the cost by 45% per kilowatt, for all Panamanians.

While opposing the proposals, The Vice Minister of Labor, Roger Tejada, warned that it would be “irresponsible” to reduce the cost of electricity by 45% as proposed, reported La Estrella de Panama.

Tejada, in yesterday’s session of the dialogue for Panama, stated that the only option in the short and medium term is the implementation of a state subsidy, as is currently being done to reduce the rate to certain sectors of the population as was done with the fuel price.

He assured that a subsidy greater than 50% would be required to achieve what the popular organizations propose.

In this regard, the secretary of energy, Jorge Rivera Staff, stated that in order to influence the price of electricity in the short term, the available tool is the use of the subsidy, and pointed out that none of the proposals from the popular sectors would have the desired impact, neither in the medium nor in the long term.

Carlos Carcache, manager of the Electric Generation Company (Egesa), said on the issue of the nationalization of generating companies, that all these companies are under contracts and concessions with the State for long periods of years, Therefore, he indicated that breaking with that previously agreed long-term contractual structure would be violating the laws. “Those were decisions that were made 26 years ago,” Carcache said.

After listening to the proposals of the representatives of the Executive Branch, Armando Espinosa, from the Association of Independent Teachers, stated that the government has “blatantly” told the people that it does not want to lower the electricity rate, reported La Estrella de Panama.

“They want to suggest the issue of subsidies. Until when do they want to indebt the Panamanian people? The Panamanian people are clear about what they want. You (the government) do not want to touch the quasi monopolies of the electricity sector. Explain why you do not want to touch them,” exclaimed Espinosa at the dialogue table.

Fernando Castañeda, from the Association of Physicians, Odontologists and Allied Workers of the Social Security Fund, asked the government authorities to explain the reasons that prevent them from rescinding the contracts with the electricity companies.

“The government has no proposals for lowering the electricity bills to Panamanians, explain what you can do,” he said after saying that the government is beating around the bush on this issue.

Carlos Mosquera, general manager of the Electricity Transmission Company (Etesa), stated that it is not that the government is avoiding the issue, but that there are situations that must be viewed responsibly.

He warned that with a nationalization proposal, the development of electricity generation, distribution and transmission infrastructures could be compromised in the medium and long term with an inadequate infrastructure.

When agreements are reached on this important point on the list of demands, still to cover are a discussion on Social Security Fund issues, addressing corruption and transparency, and establishing a multi-sector mechanism to follow up on all the agreements made.