| REGULATORY FRAMEWORK | NOTE 2 REGULATORY FRAMEWORK
2.1 Generation 2.1.1
Generation units The
Company’s revenues related to this segment come from: i) sales contracts with large users within the MAT (Resolutions No.
1,281/06 and No. 281/17); ii) supply agreements with CAMMESA (Resolutions No. 220/07, No. 21/16, No. 287/17 and Renovar Programs)
and iii) sales to the Spot market pursuant to the provisions applicable within the WEM administered by CAMMESA (SRRYME Resolution
No. 1/19 as from March 2019, SE Resolution No. 31/20 as from February 2020 and SE Resolution No. 441/21 as from February 2021).
The Company’s generating units, held directly and through its subsidiaries and joint ventures, are detailed below: Schedule of generating units in operation
In operation:
Generator Generating unit Tecnology Power Applicable regime (1)
CTG GUEMTG01 TG 100 MW Energy Plus Res. No. 1,281/06
CTG GUEMTV11 TV ≤100 MW Resolution No. 440/21
CTG GUEMTV12 TV ≤100 MW Resolution No. 440/21
CTG GUEMTV13 TV >100 MW Resolution No. 440/21
Piquirenda PIQIDI 01-10 DI ≤42 MW Resolution No. 440/21 (2)
CPB BBLATV29 TV >100 MW Resolution No. 440/21
CPB BBLATV30 TV >100 MW Resolution No. 440/21
CT Ing. White BBLMD01-06 MCI 100 MW Resolution No. 21/16
CTLL LDLATG01/TG02/TG03/TV01 CC >150 MW Resolution No. 440/21 (2)
CTLL LDLATG04 TG 105 MW Res. No 220/07 (75%)
CTLL LDLATG05 TG 105 MW Resolution No. 21/16
CTLL LDLMDI01 DI ≤42 MW Resolution No. 440/21
CTGEBA GEBATG01/TG02/TV01 CC >150 MW Resolution No. 440/21
CTGEBA GEBATG03 TG 169 MW Energy Plus Res. No. 1,281/06
CTGEBA GEBATG03/TG04/TV02 CC 400 MW Resolution No. 287/17
Ecoenergía CERITV01 TV 14 MW Energy Plus Res. No. 1,281/06
CT Parque Pilar PILBD01-06 MCI 100 MW Resolution No. 21/16
CTB EBARTG01 - TG02 TG 567 MW Resolution No. 220/07
HIDISA AGUA DEL TORO HI HI – Media 120<P≤300 Resolution No. 440/21
HIDISA EL TIGRE HI Renewable ≤ 50 Resolution No. 440/21
HIDISA LOS REYUNOS HB HB – Media 120<P≤300 Resolution No. 440/21
HINISA NIHUIL I - II - III HI HI – Small 50<P≤120 Resolution No. 440/21
HPPL PPLEHI HI HI – Media 120<P≤300 Resolution No. 440/21
P.E. M. Cebreiro CORTEO Wind 100 MW Renovar
PEPE II PAMEEO Wind 53 MW MAT Resolution No. 287/17
PEPE III BAHIEO Wind 53 MW MAT Resolution No. 287/17
(1) Subsequent power and energy is remunerated in the spot
market according to Resolution No. 440/21.
(2) During the months of July and October, the contracts
under Resolution No. 220/07 of CTP and TV01 of CTLL, respectively, have ended. Power and energy will be remunerated in the spot
market according to Resolution No. 440/21.
In construction: Schedule of generating units in construction
Generator Tecnology Capacity Applicable regime
CTB CC 280 MW Resolution No. 220/07
PEPE III Wind 81 MW MAT Resolution No. 287/17 2.1.2 Sales contracts with large users within
the MAT 2.1.2.1 Energy Plus Aiming to encourage new generation works,
in 2006, the SE approved Resolution No. 1,281/06 in which established a specific regime which would remunerate newly installed generation
sold to a certain category of Large Users at higher prices. The Energy Plus service consists of the
offer of additional generation availability by generators, co-generators and self-generators which, as of the date of publication of SE
Resolution No. 1,281/06, were not WEM agents or did not have facilities or an interconnection with the WEM. Considering that:
- These plants should have fuel supply and transportation facilities;
- The energy used by GU300 in excess of the base demand (energy consumption for 2005 year) qualifies for
Energy Plus agreements within the MAT at a price negotiated between the parties; and
- For new GU300 entering the system, their base demand will equal zero. If a generator cannot meet the power demand
by an Energy Plus customer, it should purchase that power in the market at the operated marginal cost, or, alternatively, support the
committed demand in case of unavailability through agreements with other Energía Plus generators. Currently, the Company has Power Availability
agreements in force with other generators whereby, in case of unavailability, it may purchase or sell power to support the contracts mutually. Furthermore, the SE, through Note No.
567/07, as amended, established that GU300 not purchasing their surplus demand in the MAT should pay the Average Incremental Charge of
Surplus Demand. As from the month of June 2018, pursuant to SE Note No. 28663845/18, the CMIDE became the greater of $1,200/MWh or
the temporary dispatch surcharge. Under this regime, the Company —through
its power plants Güemes, EcoEnergía and Genelba— sells its energy and power capacity for a maximum amount of 283 MW.
The values of Energy Plus contracts are mostly denominated in U.S. dollars. 2.1.2.2 Renewable Energy Term Market (“MATER”
Regime) Pursuant to Resolution No. 281/17, the
MEyM regulated the MATER Regime with the purpose of setting the conditions for large users within the WEM and WEM distributing agents’
large users covered by Section 9 of Law No. 27,191 to meet their demand supply obligation from renewable sources through the individual
purchase within the MATER from renewable sources or self-generation from renewable sources. Projects destined to the supply of electric
power from renewable sources under the MATER Regime may not be covered by other remuneration mechanisms, such as the agreements under
the Renovar rounds. Surplus energy is sold in the spot market. Finally, contracts executed under the
MATER Regime are administered and managed in accordance with the WEM procedures. The contractual terms —life, allocation priorities,
prices and other conditions, notwithstanding the maximum price set forth in Section 9 of Law No. 27,191— are freely agreed between
the parties, although the committed electricity volumes are limited by the electric power from renewable sources produced by the generator
or supplied by other generators or suppliers with which it has purchase agreements in place. Within the framework of this regime, the
Company, through its PEPE II and III wind farms, sells energy for a maximum amount of 106 MW and, additionally, has started selling third-party
generators’ renewable energy for an approximate volume of 2 MW. 2.1.2.3 MATER dispatch priority SE Resolution No. 551/21 published on
June 16, 2021 modified the dispatch priority maintenance system established by Resolution No. 281/17. Overall, it replaces the granting
of a security for the maintenance of the dispatch priority by the payment of a quarterly installment of US$ 500/MW until commissioning
within the declared term or a maximum term of 24 months as from the priority assignment. It also established certain conditions for obtaining
an extension in the committed commissioning date, which, according to the project development level and the requested extension term,
requires a payment between 500 and 1,500 US$/MW/month. Additionally, it allows projects with
an assigned dispatch priority but not yet commissioned to continue their execution keeping the dispatch priority, or to waive such priority,
thus releasing the transmission capacity. The Company, as owner of the PEPE IV Wind
Farm project, located in Las Armas, Province of Buenos Aires, notified its decision to waive the timely granted dispatch priority, and
recovered the security it had provided. As a result, CAMMESA notified that the already initiated execution of the security was determined
to be moot as it had no further claim against the Company; therefore, as of September 30, 2021, the amount of US$ 12.5 million recorded
for to such effect was recovered and disclosed under the item “Other operating income” of the Consolidated Statement of Comprehensive
Income. Under MEyM Resolution No. 281/17, the
term for submitting MATER dispatch priority requests for the third quarter of 2021 expired on September 30, 2021. Given the large number
of projects submitted, a tie-breaking mechanism was implemented on October 29, 2021 to define priority allocation based on the available
transmission capacity. The Company presented a 50 MW extension project for the de la Bahía wind farm (PEPE III) and was awarded
a 36 MW dispatch priority. The Company estimates it may obtain the dispatch priority for the remaining power capacity in future rounds. For further information on the extension
project, see Note 17.1. 2.1.3 Supply Agreements with CAMMESA 2.1.3.1 SE Resolution No. 220/07 Aiming to encourage new investments to
increase the generation offer, the SE passed Resolution No. 220/07, which empowers CAMMESA to enter into Agreement with WEM Generating
Agents for the energy produced with new equipment. These will be long-term agreements and the price payable by CAMMESA should compensate
for the investments made by the agent at a rate of return to be accepted by the SE. Under this regulation, the Company, through
Loma la Lata and Ensenada de Barragán thermal power plants, has contracts with CAMMESA to sell energy and power capacity for a
total amount of 646 MW. In turn, the Ensenada de Barragán thermal power plant has an expansion project underway to add 280 MW under
this scheme, which commissioning is estimated for the third quarter of 2022. For further information on the project to the CC at CTB,
see Note 5.2.3. It is worth highlighting that some contracts
for the Piquirenda and Loma de la Lata power plants, for a total of 210 MW, expired in July and October 2021, respectively. 2.1.3.2 SE Resolution No. 21/16 As a result of the state of emergency
in the national electricity sector, the SE issued Resolution No. 21/16 calling for parties interested in offering new thermal power generation
capacity with the commitment to making it available through the WEM for the 2016/2017 summer; 2017 winter, and 2017/2018 summer periods. For the awarded projects, wholesale power
purchase agreements were entered into with CAMMESA for a term of 10 years, with a remuneration made up of the available power capacity
price plus the variable non-fuel cost for the delivered energy and the fuel cost (if offered), less penalties and fuel surpluses. Surplus
power capacity is sold in the spot market. Pursuant to this resolution, the Company,
through its Loma de la Lata, Ingeniero White and Pilar thermal power plants, has effective agreements with CAMMESA for the sale of energy
and power capacity for a total 305 MW. 2.1.3.3 SE Resolution No. 287/17 On May 10, 2017 the SE issued Resolution
No. 287/17 launching a call for tenders for co-generation projects and the closing to CC over existing equipment. The projects should
have low specific consumption (lower than 1,680 kcal/kWh with natural gas and 1,820 kcal/kWh with alternative liquid fuels), and the new
capacity should not exceed the existing electric power transmission capacity; otherwise, the cost of the necessary extensions will be
borne by the bidder. For the awarded projects, wholesale power
purchase agreements were entered into for a term of 15 years, with a remuneration made up of the available power capacity price plus the
variable non-fuel cost for the delivered energy and the fuel cost (if offered), less penalties and fuel surpluses. Surplus power capacity
is sold in the spot market. Pursuant to this regulation, the Company,
through its Genelba thermal power plant, has entered into an agreement with CAMMESA for the sale of energy and power capacity for a total
400 MW. 2.1.3.4 Renovar Programs In order to meet the objectives, set by
Law No. 26,190 and Law No. 27,191 promoting the use of renewable sources of energy, the MEyM called for open rounds for the hiring of
electric power from renewable sources (Renovar Programs, Rounds 1, 1.5 and 2) within the WEM. These calls aimed to assign power capacity
contracts from different technologies (wind energy, solar energy, biomass, biogas and small hydraulic developments with a power capacity
of up to 50 MW). For the awarded projects, renewable electric
power supply agreements were executed for the sale of an annual committed electric power block for a term of 20 years. Additionally, several measures were established
to promote the construction of projects for the generation of energy from renewable sources, including tax benefits (advance VAT reimbursement,
accelerated depreciation of the income tax, import duty exemptions, etc.) and the creation of a fund for the development of renewable
energies destined, among other objectives, to the granting of loans and capital contributions for the financing of such projects. Recently, the SE passed Resolution No.
1,260/21 to address issues regarding the projects under the different Renovar rounds that did not meet committed commissioning terms.
Upon satisfaction of certain conditions, the resolution gives project awardees the option to: i) terminate the current contract with CAMMESA
against the payment of a sum of money; ii) amend the contract and extend the term for commissioning against a reduction in the contract
price and term; iii) commission the project for a power capacity lower than that committed initially. Under the Renovar programs, the Company, through
Greenwind, has a supply agreement in place with CAMMESA for a total of 100 MW for the PE Mario Cebreiro project, which was commissioned
in 2018, within the timely committed term. 2.1.4 Remuneration at the Spot market Resolution SRRYME No. 1/19 applicable
as from March 2019, established remunerative items based on technology and scale with US$-denominated prices payable in $ by applying
BCRA’s exchange rate. On February 27, 2020, SE Resolution No.
31/20 was published in the BO, which superseded the remuneration scheme established by SRRYME Resolution No. 1/19, and provided as follows:
i) reduced U.S.-denominated values for available power capacity, maintaining the values of the remuneration for generated and operated
energy; ii) translated remuneration values to Argentine pesos at a 60 $/US$ exchange rate; and iii) set an additional remuneration, in
pesos, for the power capacity generated during the hours of maximum thermal demand of the month, taking into consideration the average
power capacity generated by thermal generators and the average power capacity operated by hydroelectric generators. Besides, SE Resolution No. 31/20 set a
monthly remuneration update scheme with a factor contemplating a 60% CPI and 40% IPIM adjustment. However, on April 8, 2020, through Note
No. 2020-24910606-APN-SE#MDP, the SE instructed CAMMESA to postpone the application of this automatic adjustment mechanism. On May 19, 2021, SE Resolution No. 440/21
provided for a 29% increase in spot generation remuneration values, and repealed the automatic adjustment mechanism established by SE
Resolution No. 31/20. This increase to be applied as from the economic transaction for February 2021, provided the generator waives/dismisses
all administrative/judicial claims filed on account of the failure to apply the automatic adjustment formula provided for by SE Resolution
No. 31/20 within 30 days as from SE Resolution No. 440/21publication, or as from the month in which the generator submits its waiver/dismissal,
if later. The waiver includes the obligation to withdraw any claim brought by the generating agent’s shareholders on account of
the failure to apply the automatic adjustment mechanism provided for by SE Resolution No. 31/20, whether in Argentina or abroad. The Company and its subsidiaries filed
the waiver/dismissal within the previously indicated 30-day period. 2.1.4.1 Remuneration for Available Power Capacity 2.1.4.1.1 Thermal Power Generators A minimum remuneration for power capacity
based on technology and scale was established, and generating, co-generating and self-generating agents owning conventional thermal power
plants were allowed to offer guaranteed availability commitments for the energy and power capacity generated by their units and not committed
under sales contracts with large users within the MAT and supply agreements with CAMMESA. Availability commitments are tendered
for quarterly periods: a) summer (December through February); b) winter (June through August) and c) ‘other,’ which comprises
two quarters (March through May, and September through November), the thermal generators’ remuneration for committed power capacity
being proportional to their compliance. The minimum remuneration for generators
with no availability commitments includes the following scales and prices: Schedule of minimum remuneration to thermal generators
Technology / Scale
SRRYME No. 1/19 (US$ / MW-month)
SE No. 31/20 ($ / MW-month)
SE No. 440/21 ($ / MW-month)
Large CC Capacity > 150 MW 3,050 100,650 129,839
Large ST Capacity > 100 MW 4,350 143,550 185,180
Small ST Capacity ≤100 MW 5,200 171,600 221,364
Large GT Capacity > 50 MW 3,550 117,150 151,124 The remuneration for guaranteed power
capacity to generators with availability commitments is: Schedule of remuneration for thermal generators with guaranteed power capacity
Period
SRRYME No. 1/19 (US$ / MW-month)
SE No. 31/20 ($ / MW-month)
SE No. 440/21 ($ / MW-month)
Summer
- Winter 7,000 360,000 464,400
Fall - Spring 5,500 270,000 348,300 In the case of thermal power plants with
a power capacity equal to or lower than 42 MW in total, the current resolution applies a minimum remuneration of 402,480 $/MW-month,
and a remuneration of 541,800 $/MW-month and 425,700 $/MW-month for the guaranteed power capacity in the summer-winter and fall-spring
periods, respectively. Likewise, a coefficient derived from the
average utilization factor over the unit’s last twelve months is applied to the power capacity remuneration: with a minimum 70%
of the utilization factor, 100% of the power capacity payment is collected; if the utilization is between 30% and 70%, the power capacity
payment ranges from 70% to 100%; and if the utilization factor is lower than 30%, 70% of the power capacity payment was collected until
January 2020 and 60% of the power capacity payment is collected as from February 2020 (see transitional measure in Note 2.1.4.3). Since February 2020 an additional remuneration
for the hours of maximum thermal requirement of the month (hmrt) was established, which corresponds to the 50 hours with the largest
dispatch of thermal generation of each month divided into two blocks of 25 hours each, applying the following prices to the average generated
power: Schedule of additional remuneration to thermal generators
Period SE No. 31/20 SE No. 440/21
First 25 hours ($ / MW-hmrt)
Second 25 hours ($ / MW-hmrt)
First 25 hours ($ / MW-hmrt)
Second 25 hours ($ / MW-hmrt)
Summer – Winter 45,000 22,500 58,050 29,025
Fall - Spring 7,500 - 9,675 - 2.1.4.1.2 Hydroelectric Generators Power capacity availability is determined
independently of the reservoir level, the contributions made, or the expenses incurred. Furthermore, in the case of pumping hydroelectric
power plants, the operation as turbine and pump at all hours within the period is considered to calculate availability. The base remunerations includes the following
scales and prices: Schedule of base and additional remunerations to hydroelectric generators
Technology / Scale
SRRYME No. 1/19 (US$ / MW-month)
SE No. 31/20 ($ / MW-month)
SE No. 440/21 ($ / MW-month)
Medium HI Capacity > 120 ≤ 300 MW 3,000 132,000 170,280
Small HI Capacity > 50 ≤ 120 MW 4,500 181,500 234,135
Medium Pumped HI Capacity > 120 ≤ 300 MW 2,000 132,000 170,280
Renewable HI Capacity ≤ 50 MW 8,000 297,000 383,130 The payment for power capacity is determined
by the actual capacity, hours of unavailability due to programmed and/or agreed maintenance are not computed for the calculation of the
remuneration. However, to consider the incidence of programmed maintenance works in power plants, SME Note No. 46631495/19 provided for
the application of a 1.05 factor over the power capacity payment. In the case of hydroelectric power plants
maintaining control structures on river courses and not having an associated power plant, a 1.20 factor is applied to the plant at the
headwaters. Lastly, an additional remuneration was
established amounting 500 US$/MW-month for pumping power plants and 1,000 US$/MW-month for conventional plants, effective until January
2020. The allocation and collection of 50% of the additional remuneration were conditional upon the generator taking out insurance, to
CAMMESA’s satisfaction, to cover for major incidents on critical equipment, and upon the progressive updating of the plant’s
control systems under an investment plan to be submitted based on criteria defined by the SEE. Later, an additional remuneration was set
for the hours of maximum thermal demand (hmrt), corresponding to the 50 hours with the largest dispatch of thermal generation in
each month, divided into two blocks of 25 hours each: Schedule of hydroelectric generators by technology and scales values
Period SE No. 31/20 SE No. 440/21
First 25 hours ($ / MW-hmrt)
Second 25 hours ($ / MW-hmrt)
First 25 hours ($ / MW-hmrt)
Second 25 hours ($ / MW-hmrt)
Summer - Winter 39,000 19,500 50,310 25,155
Fall - Spring 6,500 - 8,385 - 2.1.4.2 Remuneration for generated and operated energy Generated
and operated energy termal units remuneration In the case of thermal power generators, a remuneration was set for generated energy,
depending on the type of fuel used, and for operated energy, as shown below:
Remuneration
SRRYME No. 1/19 (US$ / MWh)
SE No. 31/20 ($ / MWh)
SE No. 440/21 ($ / MWh)
Generated energy Between 4 and 7 Between 240 and 420 Between 310 and 542
Operated energy 1.4 84 108 It is worth highlighting that if the thermal
generation unit operates outside its optimal dispatch, the remuneration for generated energy will be recognized at 60% of the installed
net capacity, irrespective of the energy delivered by the unit. Generated and operated energy hydroelectic units remuneration In the case of hydroelectric plants,
the following prices were established for generated and operated energy, irrespective of scale:
Remuneration
SRRYME No. 1/19 (US$ / MWh)
SE No. 31/20 ($ / MWh)
SE No. 440/21 ($ / MWh)
Generated energy 3.5 210 271
Operated energy 1.4 84 108 The remuneration for operated energy should
correspond with the grid’s optimal dispatch; however, the current resolution does not indicate which would be the consequence otherwise. In the case of pumping hydroelectric power
plants, both the generated energy and that used for pumping are considered. Besides, if it works as a synchronous condenser, 60 $/MVAr
and 77 $/MVAr are recognized under SE Resolution No. 31/20 and No. 440/21, respectively, for the megavolt-amperes exchanged with
the grid when required, in addition to the prices for operated energy. Unconventional sources remuneration As regards energy generated from unconventional
sources, a single remuneration value was set irrespective of the source used:
Remuneration
SRRYME No. 1/19 (US$ / MWh)
SE No. 31/20 ($ / MWh)
SE No. 440/21 ($ / MWh)
Generated energy 28 1,680 2,167 Energy generated before commissioning
will be remunerated by the Agency in Charge of Dispatch at 50% of the above-mentioned remuneration. 2.1.4.3 Transitory additional remuneration On November 2, 2021, SE Resolution No.
1,037/21 provided as follows: (i) the creation of an exports account in the WEM’s stabilization fund for the accumulation of income
from electricity export transactions conducted by CAMMESA, as from the economic transactions for the month of September 2021, for the
financing of energy infrastructure works; and (ii) the transitory recognition of an additional remuneration to the one established by
SE Resolution No. 440/21 for the economic transactions comprised between September 1, 2021 and February 28, 2022. On November 9,
2021, the SE, through Note NO-2021-108163338-APN-SE#ME, instructed CAMMESA to assume that covered generators have a 70% utilization factor,
therefore, 100% of the power capacity remuneration would be paid, and added an amount of $ 1,000/MWh for exported energy, which will be
distributed proportionately to the energy generated monthly by each generator. 2.1.4.4 Suspension of contracts within the MAT The suspension of contracts within the
MAT (excluding those derived from a differential remuneration scheme) provided for by SE Resolution No. 95/13 remains in effect. 2.1.5 Fuel supply for thermal power plants
On November 6, 2018, SE Resolution No.
70/18 was published in the BO, which empowered generating, co-generating and self-generating agents within the WEM to acquire the fuels
required for own generation; this resolution superseded SE Resolution No. 95/13, which provided that fuel supply for electric power generation
would be centralized in CAMMESA (with the exception of generation under the Energy Plus regime). Under the scheme set forth by SE Resolution
No. 70/18, the cost of generation with own fuels was valued according to the mechanism for the recognition of the Variable Production
Costs recognized by CAMMESA. During its term of validity, CAMMESA remained in charge of the commercial management and the dispatch of
fuels for generators that did not or could not make use of this option. In the seasonal programming conducted
on November 12, 2018, the Company opted to make use of the self-supply option, and allocated a significant part of its natural gas production
as an input for the dispatch of its thermal units. On December 27, 2019, the Ministry of
Productive Development passed Resolution No. 12/19, abrogating, effective as from December 30, 2019, SE Resolution No. 70/18, and re-establishing
the validity of section 8 and section 4 of SE Resolutions No. 95/13 and 529/14, respectively, thus restoring the centralized scheme in
CAMMESA for the supply of fuels for generation purposes (except for generators under the Energy Plus regime and with Wholesale Power Purchase
Agreements under Resolution SE No. 287/17). In December 2020, on account of the implementation
of the GasAr Plan (see Note 2.2.2.1.2), SE Resolution No. 354/20 was passed, which established a new dispatch order for generation
units based on the fuel supplied for their operation under a centralized dispatch scheme. SE Resolution No. 354/20 established the
gas volumes CAMMESA should prioritize in the electricity dispatch. In this sense, firm volumes to be used by CAMMESA were defined, including:
i) volumes corresponding to contracts entered into by CAMMESA with producers acceding to the GasAr Plan; ii) volumes corresponding to
contracts executed by adherent producers with generators acceding to the centralized dispatch (these volumes will be discounted by the
adherent producers from the applicable quota for which they should enter into contracts with CAMMESA under the GasAr Plan) and; iii) volumes
to meet the Take or Pay (“TOP”) obligations under the supply agreement entered into between IEASA and Yacimientos Petrolíferos
Fiscales Bolivianos (“YPFB”). Besides, an electricity dispatch priority
scheme was set based on the allocation of the natural gas quota taking into consideration the TOP obligations. To this effect, the following
priorities were set (within each priority level, the order of agents is set based on the generator’s production cost):
(i) Dispatch Priority 1: Generators, Self-generators and/or Co-generators supplied with a natural gas quota
under a TOP Bolivia condition assigned by IEASA. If a generator with a fuel stocking obligation optionally acquires from IEASA natural
gas from Bolivia, this volume will be included in this quota.
(ii) Dispatch Priority 2: Generators, Self-generators and/or Co-generators supplied by CAMMESA with a natural
gas quota from the centralized list of volumes up to the TOP of each contract.
(iii) Dispatch Priority 3: Generators, Self-generators and/or Co-generators supplied by CAMMESA with a natural
gas quota from the centralized list of volumes for the Daily Maximum Amount (DMA) less those corresponding to the TOP of each contract.
(iv) Dispatch Priority 4: Generators, Self-generators and/or Co-generators supplied by CAMMESA with natural
gas or LNG coming from other firm commitments undertaken by CAMMESA.
(v) Dispatch Priority 5: Generators, Self-generators and/or Co-generators supplied with a gas quota from the
unassigned, spot natural gas contracts from any source, acquired by CAMMESA and/or the Generator, according to the supply source. In the
case of a generator with its own fuel, the maximum amount to be acknowledged will be the corresponding reference prices. As regards the costs associated with the
supply of these fuels, it was established that the electricity demand will bear, among others, the regulated transportation costs, the
cost of natural gas and the applicable TOP obligations. Generating agents that kept the possibility
to purchase their fuel supply (agents under the Energy Plus regime or with Wholesale Purchase Agreements under Resolution SE No. 287/17)
could opt in or out of CAMMESA’s unified dispatch, through the operating assignment of the contracted firm transportation and gas
volumes, which impact the assigned priority order. Under such assignment, agents should waive all claims regarding the application of
SE Resolution No. 354/20. In the specific case of generators with
Wholesale Power Purchase Agreements under SE Resolution No. 287/17, it was provided that they would have the option of canceling the self-supply
obligation and the resulting recognition of its associated costs, having to maintain the respective transportation capacity for its management
in the centralized dispatch. The Company assigned the firm transportation
and gas volumes committed to supplying Genelba Plus’ CC and Energy Plus contracts, setting certain guidelines for calculating fuel
costs to support its Energy Plus contracts. In the case of the supply to Genelba Plus’
CC, the assignment will remain effective during the life of the GasAr Plan, and it may be revoked by the generator with a minimum advance
notice of 30 business days. Within this framework, the parties agreed to enter into an addendum to the Wholesale Power Purchase Agreement
to establish the modifications regarding this new supply scheme, which execution is pending as of the issuance of these Consolidated Financial
Statements.
2.1.6 Seasonal
Programming SE Resolution No. 24/21, published in
the BO on January 15, 2021, approved the seasonal programming for the November 2020-April 2021 period. Seasonal prices remained unchanged
until the month of April 2021, with reference prices being those in effect since 2019. In turn, the stabilized price set by SSEE Provision
No. 75/18 for transmission in the extra high voltage system and the distributor-based main distribution price have remained unchanged. As from April 2021, pursuant to SE Resolution
No. 131/21 (amended by SE Resolutions No. 154/21 and 204/21), the reference price for power for the Distributor’s Large Users peak
demand increases by 89% (except for public health and education organizations and agencies), reducing the gap with the actual cost and,
consequently, subsidies. The remaining prices for electricity applicable to the end demand have not been modified. On May 11, 2021 and November 1, 2021,
SE Resolutions No. 408/21 and No. 1,029/21 were published, which approved the final seasonals reprogramming for winter (May 2021 –
November 2021) and summer (November 2021 – April 2022), respectively, keeping unchanged the reference prices current as of April
30, 2021, and the stabilized price for the high-voltage and main distribution electricity transmission service established by SSEE Provision
No. 75/18. Later, SE Resolution No. 40/22, was published
in February 2022, issued new reference prices for Distributor’s Large Users with increasing ranging between 13% and 24% according
to the time of the day, and approved unsubsidized prices. It also maintained the values of the stabilized price for the high-voltage and
main distribution electricity transmission service set by SSEE Provision No. 75/18. SE Resolution No. 105/22, effective from
March 1, 2022, increased energy reference prices for customer categories not subject to increases under SE Resolution No. 40/22, that
is, public health and education entities, general and residential demand. Increases ranged between 34 and 50% for the WEM and between
10% and 20% for the Wholesale Electricity Market of Tierra del Fuego System. Additionally, new values were set for the stabilized price
for the high-voltage and main distribution electricity transmission service, abrogating prices established in SSEE Provision No. 75/18. 2.1.7 Restructuring of Federal Government’s
assets in the energy sector The Federal Government has modified the
policy adopted by the previous administration regarding the restructuring of assets in the energy sec |
