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 electricity regulatory framework approved in 1992 was based on the principle that sale and purchase of electricity in the wholesale electricity market could be freely negotiated between the agents of the industry.

In 2001, Argentina experienced an economic crisis and governmental intervention, causing the Argentine electricity generators and distributors to defer investments, and creating a vast structural deficit in the electricity supply. As a result of this, the federal government passed emergency regulations intervening in the market (eg, Resolution SE 1281/06), interfering with the free sale of electricity from generators to their customers, particularly through actions by CAMMESA, with the purpose of avoiding shortages to commercial and domestic demand.

Although the current administration is eliminating regulatory interference, nevertheless certain regulations may require the supply of electricity to certain priority customers on the basis of regulated or subsidised prices.

Power sales tariffs

Is there any tariff or other regulation regarding power sales?

In 2005 the federal government determined a minimum required power level for each agent of the wholesale electricity market. As from that moment, sale and purchase prices of electricity in the wholesale electricity market for supplies above 300kW and exceeding certain minimum power levels established by regulation (as at 2005) could be freely negotiated between the generator and the customer.

The sale of energy to distributors below 300kW is made at a ‘stabilised price’ defined by ENRE or the relevant provincial authorities, as applicable, including certain highly subsidised prices as a ‘social tariff’.

Rates for wholesale of power

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

Wholesale power rates for sales to distributors below 300kW are defined by ENRE for the federal distributors and by the relevant provincial authorities at local level.

Sale and purchase prices for supplies above 300kW and exceeding certain minimum power levels established by regulation (as at 2005) are freely negotiated without any intervention of the regulatory authorities.

Public service obligations

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

The Electricity Law establishes that the distribution and transportation services shall be considered public services. Otherwise, electricity generation is considered an independent and free industrial activity, although subject to public interest. However, as mentioned above, certain emergency regulations still in place may result in mandatory supply at regulated prices to certain priority consumers.