The draft law would require upper-income families to pay off millions of dollars in household debt and remove some energy subsidies.

The Ministry of Mines and Energy has prepared a draft bill to be submitted to Congress to require high-income earners to pay the multi-million-dollar debt from the tariff option.

In addition, several changes are proposed for the Energy and Gas Regulatory Commission (Creg), including the removal of electricity subsidies for users who meet certain conditions.

Because of this and other changes proposed by the Ministry of Mines and Energy, this bill, which is expected to be socialized this Thursday in Valledupar, has been described as a mini-reform of public services in Colombia.

According to the draft text, users in strata 4, 5, and 6, as well as non-residential regulated areas (small businesses), will assume the multi-million-dollar debt of the tariff option that households in strata 1, 2, and 3 have.

Currently, the debt under the tariff option amounts to 2.9 trillion pesos, of which 2.5 trillion pesos are from strata 1, 2, and 3. A year ago, President Gustavo Petro had assured that it would be assumed by the nation.

Now, the Creg will be responsible for defining, within a maximum of one month, the mechanisms necessary for allocating the balances of the tariff option available at the time the Congress of the Republic approves this initiative.

Additionally, this entity must determine responsibility for its calculation, settlement, collection, balance, and redistribution among the companies that provide electricity services in the country.

Another article in this draft states that the Ministry of Mines and Energy or the entity delegated to it must issue regulations to evaluate the continuation of the electricity subsidy currently provided to households in social strata 1, 2, and 3.

Currently, these subsidies cover 60 percent of subsistence consumption for households in stratum 1. For those in stratum 2, this benefit is 50 percent, and for families in stratum 3, it is 15 percent.

This assessment will apply to households whose consumption exceeds the monthly electricity consumption of users in strata that are not currently subsidized (4, 5 and 6).

It is also established that when the average consumption of a subsidized user exceeds twice the subsistence consumption, the stratum must be reassigned to one subject to contributions.

These measures will be temporary while the subsidy allocation elements established in the 2022-2026 National Development Plan and other provisions related to the application of the Universal Income Registry for the targeting of electricity subsidies are regulated and implemented .

Additionally, there will be a transition period of no more than six months to allow current users to adjust their consumption. Criteria and guidelines must also be defined for households in strata 1, 2, and 3 to request conditional reinstatement of the subsidy.

An additional change included in this draft bill prohibits the inclusion of fees, taxes, or any other contribution on electricity bills other than the value of this service.

Therefore, departments and municipalities will have a maximum period of one year, once the law comes into effect, to modify the triggering event for rates, taxes, and contributions when determined by energy consumption on the utility bill.

The Ministry of Mines and Energy also proposes modifying the number of experts on the Energy and Gas Regulatory Commission (Creg), which has been operating for more than two years with four of the six experts currently required by law.

According to the draft bill, the Creg would have five energy experts, plus three more to represent academia, energy users, and unions.

The representative of the academy would be appointed by the President of the Republic, while the representatives of the users and unions would be chosen through public competition.

Another proposed change is that experts cannot be reappointed for more than one term, as is currently the case. The requirements that energy experts must meet to be appointed to these positions are also being modified.

Now, only a university degree will be required, as it will no longer be specifically required in engineering, economics, business administration, or law. Graduate studies must be related to the energy sector.

Those who have worked as professors, researchers, consultants, or advisors on energy issues may also be selected. The total experience requirement will be reduced from more than six years to a minimum of five years.