Chile: Government plans to ‘liberate’ electric sector

Chile’s Ministry for Energy has announced its plans to completely reform the country’s electricity distribution sector, starting from a “white paper” focusing on the liberalization of the electric market. Their aim, the announcement said, would be to inject more competition into a notably static sector.

Chile’s energy market is comprised by 52% ‘Regulated’ customers, including households and small businesses, which enjoy lower tariffs set by the government. Of the remaining, 45% are ‘free clients’, who have complete freedom in negotiating their rates directly with electricity generators, and often include larger businesses.

“We find a market that has been captured by the distribution companies, and what we would like is to introduce more competition in this sector. In the end, we would want for these distributors to fight over these new customers along with new power generators, so that, in practice, these mid-sized companies will be able to access better prices” said Andrés Romero, Executive Secretary for the National Energy Commission (CNE).

Romero added that this is an issue that has only recently been considered, “we believe it to be a priority, because this is a way to keep alive the atmosphere of competition we have seen develop this year. “ In terms of the effect on prices, Romero remained cautious, saying there is no specific goal in terms of lower prices for free clients, although “if the competitively efficient price should hover around $50 US per MWh, we would try to have this be reflected in free-client contracts.”

Full Content: La Tercera

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