Brokering Law Firm

New electric power transmission system

Law No. 20.396, published in the Official Gazette on July 20th, 2016, has created a new electric power transmission system that regulates interconnection process of the two main power systems of the country (SING-SIC). This is part of the “Energy Agenda”, which purpose is to determine a clear action plan for Chile to achieve trustworthy, sustainable, inclusive and reasonably priced electric power.
This law provides the obligation to submit to the coordination of the system, including the small producers supplying energy to third parties. A Coordinator will be appointed in order to achieve this goal, who will authorize the connection of third parties to the transmission systems and will substitute the current CDEC. The Coordinator will determine the available technical capacity of the systems for these purposes.
Open access to the transmission systems shall be granted. Denying the service shall be prohibited when technical capacity is available.
The kind of compensations due to supply unavailability is regulated to an equivalent of the power supplied in the corresponding event with a valuation of 15 times the effective power rate or the market price, according to the type of client. On the other hand, the compensations per event for each transmission company is limited to a 5% of the total income obtained in the previous commercial year, in both cases limited to a maximum amount of 20.000 UTA (Chilean annual tax unit).
Different electric power transmission systems are created, namely, the National Transmission System, the Transmission System for Development centers, the Dedicated Transmission Systems, The Zonal Transmission Systems and the International Interconnection System. The latter shall allow the import and export of electric power, both for public service and private interest, which opens an interesting market with the neighboring countries. In order to participate in power transfers, the works must have been duly declared under construction and have an energization authorization for its commissioning.
The Ministry of Environment will develop a long-term power planning process for a 30-year time frame. For these purposes, it shall include various supply and demand scenarios and identify the areas where power generation development centers may exist. The Ministry shall elaborate technical reports of every development center.
On the other hand, the Coordinator shall annually present an expansion proposal for the different transmission segments. A technical report shall be issued based on this proposal. Third-party discrepancies regarding this report can be solved by an expert panel.
Finally, a transmission expansion order shall be issued. The process of determining the strips shall be initiated based on this order. The preliminary strip shall be subject to environmental assessment and can be encumbered with easements.
To set the rates, valuation studies will be performed to determine the value of the investment and the annual costs of the operation, maintenance, and management of each section.
The transmission companies may provide as security, for the financing or performance of a project, the performance or execution rights of new constructions that belong to the transmission system.