Regulation of electricity utilities – sales of power

Approval to sell power

What authorisations are required for the sale of power to customers and which authorities grant such approvals?

Electricity supply is open to competition, subject only to a registration regime before the DGEG. Suppliers may freely buy and sell electricity. For this purpose, they have a right of access to the national transmission and distribution networks upon payment of access tariffs set by ERSE.

As required by the Electricity Directive, the Electricity Framework also establishes a last-resort supplier that is subject to licensing by DGEG and regulation by ERSE. The last-resort supplier is responsible for the purchasing of all electricity generated by special regime generators which benefit from a guaranteed remuneration scheme (ie, feed-in tariff), and for the supply of electricity to customers who purchase electricity under regulated tariffs, and is subject to universal service obligations. The last-resort supplier is expected to exist until the free market is fully competitive.

Power sales tariffs

Is there any tariff or other regulation regarding power sales?

There are tariffs concerning sales of electricity by a supplier of last resort, which are subject to extensive regulation. Final customer tariffs applicable to the regulated market are differentiated by voltage level, tariff option and the period of electricity consumption. These tariffs, when set, should be uniform throughout mainland Portugal within each voltage level, subject to specified exceptions based on volume.

The price of electricity sold by suppliers operating under a ‘liberalised’ market system is not administratively set and as such said suppliers may define the price they wish. Nevertheless, consumers must also pay network access tariffs and ‘global use of system’ tariffs in addition to the electricity price set by suppliers.

Rates for wholesale of power

Who determines the rates for sales of wholesale power and what standard does that entity apply?

In Portugal, the wholesale market for electricity is liberalised and organised at an Iberian level (through the MIBEL), without prejudice of the possibility of market agents entering into bilateral power purchase agreements.

Thus, wholesale rates are generally determined by supply and demand, notwithstanding special rules applicable to offtaker purchases and sales of electricity.

The offtaker, which is also the supplier of last resort, is obliged to: acquire the electricity generated from renewable and co-generation plants which benefit from a feed-in tariff; and acquire electricity necessary to supply its clients through MIBEL in the quantities and at auctions defined by DGEG. All electricity purchased by this entity which exceeds the amount of power required to supply its clients must be resold in the market.

Public service obligations

To what extent are electricity utilities that sell power subject to public service obligations?

Electricity suppliers must comply with certain public service obligations to ensure the quality and continuity of supply, as well as consumer protection with respect to prices, access tariffs and access to information in simple and understandable terms.

As required by Directive 2009/72/EC, Decree-Law No. 29/2006 also establishes a last-resort supplier that is subject to licensing by DGEG and regulation by ERSE. The last-resort supplier is responsible for the purchasing of all electricity generated by special-regime generators which benefit from a guaranteed remuneration scheme, and for the supply of electricity to customers who purchase electricity under regulated tariffs, and is subject to universal service obligations. The last-resort supplier is expected to exist until the free market is fully competitive, as provided for in Directive 2009/72/CE.