The President of the Republic has issued the General Regulations for the Organic Public Power Sector Law.[1] The Regulations establish the provisions required for the application of the Law and:
- determine the duties and powers of the different administrative institutions in matters of electric power: (i) Ministry of Energy and Non-Renewable Natural Resources; (ii) Agency for the Regulation and Control of Electricity – ARCONEL; (iii) National Electricity Operator – CENACE;
- establish criteria for the expansion of the electricity sector; the Ministry of Energy and Non-Renewable Natural Resources will plan the expansion.
- Electricity will be generated by state-owned companies, joint ventures, private companies, consortiums or partnerships and the grassroots and solidarity economy that obtain the respective License granted by the Ministry of Energy and Non-Renewable Natural Resources. The Regulations establish the obligations that these companies must meet, including those related to territorial development projects.
- The Ministry of Energy and Non-Renewable Natural Resources will consider in the planning the development of projects with Non-Conventional Renewable Energy (ERNC). The Regulations establish criteria for calls for tenders, selections, incentives and participation in these processes.
- The state will be responsible for the transmission of electricity from the power stations to the points of connection and the distribution and marketing of electricity. The Regulations set out the institutions that will provide the services, and the obligations and rights of these institutions and of the consumers and users.
- The Regulations regulate the types of transactions to be made in the electricity sector and their characteristics and conditions. The following will be allowed:
- The purchase/sale of energy through regulated agreements signed with all distribution companies.
- The purchase/sale of energy through bilateral agreements.
- The purchase/sale of energy through bilateral agreements signed between wholesalers licensed to make international transactions.
- Short-term transactions for special cases.
- The Regulations also contain a section on the regulation of international electric power transactions.
- Title III of the Regulations governs the issuance, conditions, obligations, rights, classification, competent authority, modifications, transfer, etc. of licenses. It also regulates the processes for selection, projects, blocks of generation and award.
- Includes the method for establishing tariffs and applicable subsidies.
- Regarding environmental responsibility, sector participants must obtain the respective permits and comply with all obligations set out in the applicable regulations. As part of its responsibilities, ARCONEL will monitor compliance with environmental regulations for the purpose of controlling licenses. Penalties issued by the National Environmental Authority must be reported to the Ministry of Energy and Non-Renewable Natural Resources and to ARCONEL, so that they can take the corresponding actions concerning licenses.
- Regarding the penalty system for electric power, ARCONEL is the entity responsible for hearing, resolving on and determining alleged infractions, officially or at the request of one of the parties.
- Regulated contracts that were signed before the Regulations were issued and made between distributors and generators or self-generators with a license, will remain in effect until the terms of the contracts have ended.
- The generators and self-generators that signed licenses before the Law came into effect, for non-conventional renewable energy projects protected under specific regulations that granted preferential conditions for their participation, can sign bilateral agreements or regulated agreements for the sale of energy after the preferential period and during the validity of the license.
- Concession agreements, permits or licenses which were signed by private legal entities with the National Electricity Council – CONELEC or with the Agency for Regulation and Control – ARCONEL, remain in effect pursuant to their terms.
[1] Decree No. 856 – Official Register Supplement No. 21 of August 20, 2019.
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