The government and the Supreme Court are negotiating a way out of the current conflict over utility rate hikes, with President Mauricio Macri and Chief Justice Ricardo Lorenzetti holding talks after the country’s top tribunal yesterday ruled that the administration will have to explain its reforms before moving forward.
The Supreme Court asked the Executive Branch yesterday to file a report explaining the reasons for the hike, adding a further month of suspense before a resolution to the utility rates saga arrives — a final ruling is now unlikely before August.
Hours after that, reports of a private meeting between Macri and Lorenzetti at the Pink House were leaked, and while government spokesmen refused to talk about the specifics of the debate, they did admit that the two officials have been talking regularly lately. The negotiations come after the government has been forced to backpedal on part of its cuts to rate subsidies amid a legal, political and social backlash.
The government will now have 10 working days to answer the Supreme Court’s enquiries, but considering that this is the last week before the beginning of the judicial recess, the order means that Macri’s economic cabinet will not have its hands tied over the issue for some more weeks yet.
The Supreme Court said that the ENARGAS gas regulating agency will have to report on the evolution of rates since 2001, the parameters used to determine the hikes and the criteria of “gradualism and progressiveness” applied to design them.
Crucially, the ruling did not endorse any explicit position on the hikes themselves, saying there is no case to decide so far.
The ruling was signed by Lorenzetti, Elena Highton de Nolasco, Juan Carlos Maqueda and Horacio Rosatti.
It came as a response to Solicitor General Carlos Balbín “per saltum” request to the country’s top tribunal, which asked the Supreme Court to rapidly rule on the legality of the hikes after several local courts froze them across key cities.
It also took place a day after the government announced that no household will be landed with a bill five times higher (or 400 percent more) than what they paid a year ago — no matter how much energy is consumed, following protests about how families were facing bills ten or 15 times higher than a year ago.
Multiple fronts
The legal conflict hasn’t only been focused on the Supreme Court, though, as the government also filed a request in a La Plata federal court against a judge’s decision freezing the new rates announced this year.
Energy Minister Juan José Aranguren yesterday said in an interview that the mere filing of that request suspends the judge’s injunction, thus allowing the government to continue using the rates it decreed on April 1 this year.
With the injunction, the judge argued that the government failed to hold public hearings as the law requires before any rate reforms. In its appeal, the government responded that the hearings for the new rates had already been held during the Kirchnerite era, even though the hikes ended up being postponed. New hearings, the Executive branch argues, would only be needed before an integral rate revision later this year.
Aranguren also said that the injunction also freezes the new “social rates” created by Macri’s administration to reduce the costs of energy for the most vulnerable users, and that this consequence was “alarming.”
Outside the Tribunales courthouse, left-wing demonstrators organized a protest against the hikes, in another sign of how heated the issue has become over the last few weeks, following resistance from politicians (see below) and activist organziations too.
Mistakes
The Energy minister also admitted that some mistakes were made during the implementation of the new rates, saying that “there were some impacts that we did not consider and that is what we are trying to correct.”
The government now admits that the new rate structure it created on April 1, which penalized users if their consumption increased on the yearly comparison, while also increasing prices the more they consumed, was not ideal.
A colder winter than was expected, following a relatively mild one in 2015, meant that some people saw their bills spiral out of control, the government now believes.
But Aranguren was unmoved regarding the main issue, saying that it would be “absolutely unsustainable” to suspend hikes completely.
Meanwhile, provisional Senate president Federico Pinedo also toned down the president’s words on the hikes, saying that they might not have been “wise.”
Macri had argued that anyone who was wearing a t-shirt or barefoot at home during winter was wasting energy, prompting anger about past instances in which his family was seen doing just that while in photos uploaded to social media Snapchat during Argentina’s participation at the Copa América soccer tournament only weeks ago.
But Macri himself didn’t retreat: “I did not understand the criticism. When I walked the streets of Buenos Aires city (during the campaign), I remember I was once wearing an overcoat under this terrible cold weather and the person who opened the door of his house was wearing a sleeveless shirt, shorts and sandals. I asked him why and he said he couldn’t stand the heat inside. This is what has been happening and what we need to change,” the president said during a public appearance with Education Minister Esteban Bullrich.
Prat-Gay, meanwhile, shared some of Aranguren’s views, arguing that “we might have made a mistake in identifying who could pay the full rates, and that is what we are trying to correct. But in gas, electricity and transportation we have established the social rates that cover between 20 and 30 percent of the population.”
Herald staff with DyN, Télam
http://buenosairesherald.com/article/217970/supreme-court-delays-gas-hikes-ruling
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