Argentina expected to announce electricity pricing reform in February

Bnamericas Published: Thursday, January 21, 2016
Argentina expected to announce electricity pricing reform in February

Argentina's new energy minister Juan José Aranguren is likely to announce changes to the country's electricity pricing scheme sometime in February, according to a Raymond James research note.

The financial advisory firm said that regulated market electricity prices in Argentina currently average US$30/MWh, versus a regional average of US$120/MWh.

Raymond James cited a recent announcement from economy minister Alfonso Prat-Gay (pictured) of planned subsidy cuts for natural gas and power totaling 1.5% of GDP during 2016. Energy subsidies currently account for 4-5% of GDP.

The note said that Pampa Energía is best-positioned among Argentine utilities, "as it offers exposure to the generation sector, which we believe will be the best-performing segment in the industry, while benefitting from the improvement in profitability in the other businesses (transmission and distribution)."

Pampa controls Argentina's largest power distributor Edenor, in addition to assets in the transmission, generation and oil and gas segments.

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