The government has recently invited comments on the new Electric Bill. The final version of the bill, which will be revised in light of comments received by October 5 2000, will be presented to the president in mid-October.

The bill provides a substantial transformation of the current regulatory framework. The main objectives are:

  • to guarantee the availability and quality of electric power to the entire population;
  • to lower market entry barriers;
  • to stimulate investments in the electric power sector; and
  • to establish a more transparent system of setting prices and determining compensations in the event of delivery failures.

The main changes foreseen are:

  • the creation of an energy pool, to be administered independently. Transactions to adjust short-term supply and demand will be handled by this pool;
  • the creation of a system operator, responsible for power dispatching and dispatch adjustments;
  • the incorporation of retail companies as intermediaries in the electricity market;
  • the introduction of restrictions and conditions on the ownership and management of power transmission systems, in order to avoid the distortions that may arise from the vertical integration of power companies;
  • changes to systems for setting tariffs within the power transmission system. Investments made in each segment of the system will be paid according to the commercial use of that line, while operational and maintenance costs will be paid in function of the physical use of the network;
  • changes to the tariff regulation system, at the distribution level;
  • the periodic definition of minimum quality norms, to be made with the participation of sector agents, consumers and the public; and
  • the definition of the responsibility of the power producer, transmitter, distributor and retailer, to the final consumer and the contractual determination of eventual compensation.

For further information on this topic please contact Jose Luis Prieto at Prieto & Cía
by telephone (+56 2 280 5000) or by fax (+56 2 280 5001) or by e-mail ([email protected]).

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