Law Establishes New Power Transmission Systems and Creates an Independent Coordinating Body for the National Power System (Law No. 20. 936)
by Juan Francisco Mackenna, José Miguel Bustamante, José Tomás Hurley, Diego Ibarrola
Published: August, 2016
Submission: September, 2016
On July the 27th 2016, Law No. 20.936 that establishes New Power Transmission Systems and creates an Independent Coordinating Body for the National Power System (the “Transmission Law” or “New Law”) was published. Its stated objectives are to ensure that transmission does not become an obstacle to power generation, increase competition in the electrical market and boost the development of non-conventional renewable energies. The New Law introduces relevant changes to the current electrical regulation contained in the Electrical Services General Law (“LGSE”), that was established by Decree No. 4/20.018, and to Law No. 18.410 that establishes the Superintendence of Electricity and Fuels (“The SEC Law”).
Among the main modifications introduced by the Transmission Law are the following:
Finally, it is worth noting that given the magnitude of the amendments introduced by the New Law, a transitory regime will govern the implementation of a number of matters addressed in this law. For details on this, refer to the Transitory Articles in the New Law.
1 Details regarding Development Poles and Transmission Systems for the Generation Development Poles in section 3. that follows.2 According to Article No. 85 of the LGSE, it is understood by Development Pole “geographically identifiable zones of the country, located in regions in which the National Electrical System is situated, where power generation resources from renewable energies are found, whose utilization by means of a single transmission system results of public utility due to their economic sufficiency to the power supply, complying with environmental legislation and territorial regulations”.3 According to Article No. 2 letter i) of the Law No. 19.300 of General Environmental Bases, Strategic Environmental Assessment is the procedure carried out by the respective sectorial Ministry by means of which environmental considerations are incorporated to the process of formulating general normative policies and plans seeking their integration in the dictation of such policies and plans.4 According to Article No. 71 of the Law No. 19.300, the Sustainability Ministry Council is presided by the Environment Minister, and is also composed by the Minister of Agriculture, the Minister of Finance, the Health Minister, the Economy Minister, the Energy Minister, the Minister of Public Works, the Housing Minister, the Transport Minister, the Mining Minister, and the Planning Minister.5 Before the entry into force of this New Law, the Trunk Transmission System was paid by Power Generation Companies and clients together, according to a prorate defined by the LGSE.
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