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?

The provision of power supply services to end users requires a permit from the CRE. Power supply services are classified as either: basic supply services (supply of power to small consumers), qualified supply services (supply of power to qualified (large) offtakers) and last resource supply services (back-up supply services).

Power sales tariffs

Is there any tariff or other regulation regarding power sales?

As a result of the Energy Reform, the CRE is now the agency in charge of issuing and applying the regulation of the rates for basic supply services, and approving the applicable service terms and conditions. The rates published by the CRE considered certain methodology based on the costs of each segment of the electricity industry value chain, as well as a transition process to allow end users to understand the new applicable rates. The Ministry of Finance and Public Credit, Sener and the CFE participated in the creation of the aforementioned methodology. Last resource supply services, on the other hand, are subject to maximum rates, also determined pursuant to the methodologies approved by the CRE.

Qualified supply services are subject to free competition, and are not subject to regulated rates.

Rates for wholesale of power

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

Pursuant to the Electricity Industry Law, the prices for all transactions undertaken through the wholesale electricity market shall be determined by CENACE, based on the Market Rules and the offers received from the market participants. Moreover, local marginal prices (LMPs) shall be determined for each node and period, in accordance with the Market Rules, and those prices shall be applicable to the energy transactions on the wholesale electricity market.

Since the wholesale electricity market commenced its operations, CENACE has been reporting hourly LMPs for more than 2,400 nodes, identifying those in each of the three existing systems.

Public service obligations

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

Yes. Suppliers are subject to public and universal service obligations that require them to: offer their services to anyone that requests them, to the extent it is technically feasible, under efficiency, quality, reliability, continuity, safety and sustainability conditions; comply with the provisions of the Electricity Industry Law concerning social impact and sustainable development; contribute to the Electricity Universal Service Fund; and comply with the applicable clean energy and polluting emissions reduction obligations, among others.