In November 2011 the Energy Regulation Commission issued Resolution 156, which regulates electricity trading activity. Although some rules applied to the trade of electricity before the resolution was issued, the new resolution compiles them into a single document and adds new rules to bring together all of the rights and obligations of parties which purchase electricity for sale to final users.

For a company to be allowed to trade electricity in Colombia, it must:

  • be incorporated as a public utility entity under Article 15 of Law 142/1994 (electricity transmission agents may not be traders);
  • maintain an accounting system independent from that of any other activities that it may carry out (eg, generation or distribution);
  • prepare and publish a uniform conditions model contract (for regulated users);
  • create a claims office to service customers;
  • register as an electricity trading agent with the Administrator of the Commercial Exchange System (ASIC); and
  • notify the commencement of activities to:
    • the Utilities Superintendence;
    • the Energy Regulation Commission; and
    • the Subsidy and Re-distribution Solidarity Fund of the Mines and Energy Ministry.

The regulation was passed to deal with a number of difficulties faced by traders in relation to competition issues, which have resulted in the bankruptcy of certain traders and a lack of new traders entering the market. One of the main concerns among traders is a practice whereby they focus their marketing activities only on major corporate users and fail to offer services to individual low-income users.

Another concern tackled by the regulation is how and when to retire from the market traders facing serious financial difficulties. This measure is designed to avoid allowing such traders to incur further indebtedness, which may cause harm to other market agents. For example, the main causes of a trader's exit from the wholesale energy market are as follows:

  • when there is delay in payment of any of the following transactions and such payment is not duly covered by adequate guarantees:
    • transactions carried out in the electricity exchange or in the organised market for regulated demand;
    • accounts payable deriving from balances and complementary services;
    • accounts payable for charges deriving from the use of the national transmission system; or
    • any other item due to the ASIC or the Accounts Liquidator and Administrator;
  • when a provided guarantee is not approved by the ASIC within the terms established for that purpose; and
  • when the network operator informs the ASIC of the trader's default in granting the required guarantee.

In addition, the network operator shall be solely liable for damages caused to users and third parties if it accuses a trader of a default and such accusation cannot be justified. Such act may be deemed only a restrictive trade practice.

The regulation also includes provisions on the effect of a trader's exit from the market and, in particular, which agent will be in charge of servicing those users who were previously serviced by the exiting trader.

Together with Resolution 156, the commission also issued Resolutions 157 and 158, which refer to commercial frontiers and the granting of guarantees by traders.

For further information on this topic please contact Gabriela Mancero Bucheli at Peña Mancero by telephone (+57 1 640 1355) or email ([email protected]).