Chile's association of nonregulated electricity consumers Acenor sets out regulation action areas

Chile's association of nonregulated electricity consumers, Acenor, outlined four areas where it believes regulatory action is needed to support efficiency and competitiveness.

Electricity supply in Chile - including all associated charges - is 38.2% more expensive than in Peru and 36.4% more expensive than in Brazil, and achieving competitive prices is vital to attracting investment and, in turn, supporting job creation, attendees at Acenor's annual conference heard.

A chief challenge is reducing the systemic costs borne by nonregulated consumers and which regulated customers will also begin paying from 2027.

In a presentation, Acenor executive secretary Juan Ignacio Gómez detailed what he described as "four elements to rebuild regulation."

These relate to the PMGD distributed generation segment's stabilized price regime, capacity prices, criteria for systemic charges and transmission, specifically localization signals and planning flexibility.

Transmission is viewed as a priority area and is included in the government's 2026-30 energy route map, presented recently by energy minister Ximena Rincón. In parallel, Acenor is working on a proposal for a localization signal mechanism.

Another priority area is PMGD regulation. Just days ago, a related decree was approved by the office of the comptroller general.

Acenor board chair Francesca Milani described the development as "a very good signal," adding that work in individual regulatory areas should be carried out holistically rather than in isolation, with the overarching objective of securing more competitively priced electricity.

Authorities have introduced a new PMGD price stabilization mechanism, but most existing assets should not be affected until 2034 unless they change their connection point or configuration, such as by incorporating an energy storage system.

Payments associated with the PMGD stabilized price regime, described as a "competitive distortion," together with transmission "inefficiencies," amount to around US$500mn a year, conference attendees heard.

If efficiency measures are implemented, nonregulated customers could see their electricity bills fall by 10-15%.

Jaime Gallegos, head of the energy ministry's electricity market division, said the current priority of the administration is draft legislation related to end-user rates in the regulated segment and that other reforms could be tackled once that process is completed.

Lower house lawmaker Daniel Valenzuela urged haste on pending issues to support economic growth, adding that four years – the length of a presidential term – is not a long time.

In an interview that will be published in the coming days, Alfredo Solar, CEO for Chile and the Southern Cone at independent power producer Atlas Renewable Energy, told BNamericas: "From the perspective of renewable generators, we see customers as a strategic partner. And I think that, in that sense, we all need to align incentives so that regulations can be optimized.

"Especially in terms of reducing side payments, the systemic costs, and enabling a system that becomes more efficient for end consumers. I think that, in that regard, we are very much aligned with the vision that customers have."

Against this backdrop, Chilean industry would invest more if electricity prices were lower than in competing countries, attendees heard.

In a related survey, more than half of respondents said they would increase local production or investment if electricity prices were more attractive.

"The country's competitiveness is linked to competitive energy," Gómez said in his presentation.

In the copper mining sector, electricity accounts for around 8% of operating costs. In manufacturing, the proportion rises to over 20%.

Last year, electricity demand from the nonregulated segment totaled 49TWh, compared with 31TWh from the regulated segment.

(The original version of this content was written in English)