Chile is experiencing a difficult energy situation caused mainly by two factors: on the supply side, the scarcity of Argentine gas and high oil prices, have affected the availability and cost of energy. On the demand side, electricity consumption grows more than the domestic product. In normal markets this excess demand would be corrected via higher prices that would moderate consumption and stimulate higher production. In electricity that adjustment is much slower by the nature of the electricity production process and also by some rigidities that still exhibit its regulation. The rules of the electric business were dictated in 1981, when almost all of the three segments that made it was in the hands of the state. His inspiration then was, among others, to stimulate its privatization. Thus, consumers were classified according to the size of their captive (or regulated) consumption and it was assumed, somewhat heroically, that larger (free) customers could negotiate the conditions of their supply, even in those cases where That there is only one supplier that can supply them. For captive customers, the law established a system of regulated tariffs through a maximum pricing process at two levels: the price that final customers pay to the distribution companies; And, the price that the distribution companies pay the generators for the electricity they buy for resale to the final customers (the node price). Because of the importance of electricity, the price of the knot is a key price in the economy, although it is a price that is set every six months by the Ministry of Economy. This pricing model has been criticized in the past because it would have incentives for generators to delay their investment projects, their adjustment to a maximum difference from free prices will distort them and their indexing mechanisms would be insufficient. To a large extent, the recent amendments to the electricity law have corrected such imperfections in the pricing model by making it more flexible as well as affecting the supply to distributors for regulated customers. On the other hand, in 2004 the so-called short law incorporated a set of provisions among which stand out those that promote the supply of electricity and those that pretend to make the business more competitive at the level of final consumers. Regarding the offer, those who generate electricity can sell their production to the electricity system at a known price and the distributing companies are obliged to allow the connection with their facilities to those who can contribute surpluses of no more than 9 Megawatts. In terms of competition, it is decided to make it clear that free customers can contract their supply with suppliers other than the distribution companies by fixing the value of tolls that third suppliers must pay to distribution companies for using their facilities to supply customers Located within the territory of its distribution concession. All these changes point in the right direction and their real impact can be evaluated once they operate effectively. However, the future challenges in terms of electricity are large and have to do with a number of issues at both macro and micro level. Regarding the former, the options for supplying natural gas (Peruvian, Bolivian and Argentine) and liquified concentrate the most attention. At the micro level, it is important to strengthen the operation of the electrical industry in aspects such as the following:
(I) in terms of supply: it is essential to actively promote all kinds of environmentally sustainable forms of generation, such as micro hydro generation or self-generation of free customers. For this to happen, any barriers that exist and that prevent or make it difficult for these producers to reach the market using the existing network infrastructure must be removed; (Ii) on demand: bold and proactive energy efficiency measures are required through actions that economically stimulate energy savings at different levels. In this matter, the State as a consumer plays a very important role, as do the municipalities. In developed countries, these savings are generated from improvements in lighting to the economic redesign of production processes that allow the release of thousands of kilowatts of capacity causing identical end effects that increase supply; (Iii) in terms of competition: there is no doubt that decisive steps can be taken in terms of efficiency if competition in the less competitive segments of the business is favored. This is one of the main weaknesses of the distribution segment given its eminently monopolistic nature. The existence of electricity intermediaries as well as the fact that free customers located within the territory of distribution companies could have several supply options would help to make more symmetrical the current relationship that has very little free. However, since electricity distribution companies are one of the main customers of generators, they are likely to be cautious when competing for customers from their own important customers. To stimulate competition, customers, both free and regulated, could be allowed to add their consumption to trade collectively or in blocks. Similar results would be triggered if aggregation of the consumptions that a customer with multiple connection points is allowed; And (iv) regulatory matters: recent changes to the electricity law increase the number of functions of the Superintendency of Electricity and Fuels, so one wonders whether it has sufficient resources to ensure that its work of oversight and supervision of The industry will be exercised in a competent and timely manner. It is essential that this Superintendence generates in consumers the same sense of protection that other superintendencies produce for example in matters of values, dispelling any suspicion of condescending treatment with their regulated. This will be possible to the extent that consumers have broad access to information and can thus exercise control over the Superintendency, helping to reduce the risk of regulatory capture by regulators and to ensure that such entities fulfill the role they play. The economic institutionality has entrusted them.
Juan-Pablo Bórquez Yunge
Abogado y Economista
Profesor de Derecho Económico
Universidad de Chile