Speech by our CEO, Juan Ricardo Ortega, at the opening event of the Andesco Congress in Casa de Nariño
Speech by our CEO, Juan Ricardo Ortega, at the opening event of the Andesco Congress in Casa de Nariño
The relations of Grupo Energía Bogotá abide by the guidelines of behavior and rules of action established in the Code of Ethics. This code applies to all Group companies and is binding for all managers and employees.
By managing a proactive regulatory agenda and strategic partnerships, we advocated maintaining and improving the Group’s revenues derived from the regulated activities of its affiliates, in addition to ensuring the viability of new revenues.
We work in a coordinated manner with industry associations towards different government authorities, such as ministries, superintendences, regulatory commissions and planning entities, among others.
In this process, we submit policy and regulation proposals, we interact with the authorities in the periodic setting of prices and rates, and we promote the timely development of infrastructure projects, while at the same time managing potential externalities that may arise.
Our Regulation Department plays a central role in understanding the processes and fully complying with all obligations in a manner that ensures our financial sustainability, the adequate performance of infrastructure projects, monitoring of new laws and regulations, optimal interaction with the government and coordination with the industry associations and institutions, as well as representing the Group and acting as spokesperson for its position on different matters, especially of a regulatory nature.
A cross-cutting theme in all our activities during 2020 was the Energy Transformation Mission, which will imply a structural change in the energy activities in Colombia on the basis of a new institutional and regulatory framework of the electricity and gas sector, under the guidelines of the national government.
In this regard, we made progress and were very effective in influencing the agenda defined by the mission and in the specific recommendations, thanks to joint work with the business areas and the industry associations, as well as with the authorities, on the strategic matters for GEB that were included therein.
Through our regulatory management strategy, we positioned our company with the national government and the industry associations regarding the need to strengthen regulatory quality, in accordance with the parameters promoted by the OECD. Additionally, we carried out a diagnosis of the Peruvian electricity sector, as well as permanent monitoring of the country’s regulatory and political situation, in close coordination with the regulatory areas of the affiliates. We also implemented continuous analysis of the regulatory and market situation in the electric energy and natural gas sectors in the countries where we are present, in order to receive early warning regarding the implications of the pandemic on GEB’s businesses.
In 2020, PwC carried out the audit of regulatory and rates management. During the year, we consolidated a website that includes updated supporting documents that demonstrate, among other aspects, the level of participation in industry associations and meetings with authorities carried out by the Department on GEB’s strategic matters, the analyses and proposals of policies and regulations discussed with the business areas and submitted to the industry associations or government entities through communications, and a history of the tasks carried out during the year, which were reviewed during follow-up meetings.
(Own) In Colombia, we are members of industry associations such as ANDI, Andesco and Acolgen, and we actively work with them.Click here to view the annex on “Contributions to business associations”.
In Colombia, each year over 200 regulations are issued on electric energy and natural gas services, which must be reviewed to determine their impact and application.
We submitted to the vice minister of Energy (directly and through the industry associations) a proposal to identify when a regulation is substantial, as well as a baseline procedure for performing a regulatory impact analysis, in accordance with the guidelines of the OECD and CREG.
By working jointly with the industry associations, we managed to include key topics for the Group in the final recommendations of the experts of the Energy Transformation Mission.
Jointly with Andesco, we retained an international expert who performed an analysis of the proposals on the methodology for the calculation of discount rates. Said analysis was presented to different government entities.
We held a webinar on Challenges of the Analysis of Regulatory Impact in Latin America, with the participation of experts from the OECD, the Latin American Development Bank and well-known analysts from Colombia and Peru.
As a result of the joint work carried out with the Sustainability areas at the corporate offices, Transmission and TGI, we achieved significant progress with the industry associations in 9 of the 13 action lines prioritized in GEB’s socio-environmental agenda for 2020, including the following:
Submission of a bill to the Chamber of Representatives for the enactment of Law 470 / 2020, an initiative developed and led by our Group and which was managed by Andesco before the Congress of the Republic.
Formalization of the prior consultations for the Colectora Project in La Guajira, with 33 communities.
Amendment of the transition regime of the Offsetting Manual for the aggregation of offsetting obligations in linear projects: We managed to have the Ministry of the Environment and Sustainable Development publish for public consultations a new draft resolution that allows performing aggregate offsetting, which is favorable for project management.
Definition of the standard bearer initiative of GEB-TGI for Sabana de Bogotá. In the framework of the Biodiversity and Development initiative led by ANDI, we managed jointly with CAR to define the sponsorship of one of the management plans of a threatened species (L. tigrinus) and two invasive species (Acacia decurrens and common gorse): The former due to its importance for the connectivity of the territories, and the latter for their high level of presence in the Tominé reservoir. In 2021, we expect to sign the memorandum of understanding establishing the framework of cooperation for this important initiative.
Registration of GEB in the Biodiversity Information System, which, in the framework of the Biodiversity strategy for Putumayo, will enable development of the baseline that includes the departments of Putumayo, Caquetá and Nariño, the purpose of which is to leverage the alliance “SIB Colombia-ANDI: Open biodiversity database from the business sector.”
We performed an analysis, jointly with an international consultant, on “the impacts of potential reforms to the market rules for the electricity and natural gas sectors in Peru.”
In Peru, with the help of Contugas, we managed to have the Ministry of Energy and Mines grant our request of force majeure regarding contractual obligations related to activities that were not deemed essential for continuity of the service of natural gas distribution, which enabled us to focus our activities and work on the continuous and safe provision of the natural gas distribution service to users in Ica.
In 2021, we will continue to manage the implementation of the regulatory impact analysis criteria of the OECD.
Design and implement a strategy on the methodologies for remuneration of electricity transmission and natural gas transportation activities, to include criteria that are strategic for GEB. In this regard, we advocate for the methodology to maintain as principle for asset valuation the value of new replacement (VNR) and to make viable stamping for gas pipelines with the lowest utilization rates of TGI.
Regarding socio-environmental regulations, we will work on two key issues:
1. Issuance of a new methodology to prepare and present Environmental Studies (MGPEA, for the Spanish original), on which we expect acceptance of the suggestions and observations made in 2020.
2. Promote the submission and enactment of the statutory law on prior consultations. In December 2020, the Ministry of Internal Affairs communicated the general outline to the industry associations and companies, and initiated the process of consultations with the indigenous communities. We expect it to be submitted to Congress in the first half of 2021.