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Claude Bessé Arze ELECTRICITY SECTOR REFORM General Superintendency Sectoral Regulatory System Algeria, April 10, 2001.

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Presentation on theme: "Claude Bessé Arze ELECTRICITY SECTOR REFORM General Superintendency Sectoral Regulatory System Algeria, April 10, 2001."— Presentation transcript:

1 Claude Bessé Arze ELECTRICITY SECTOR REFORM General Superintendency Sectoral Regulatory System Algeria, April 10, 2001

2 LA PAZ ORURO COCHABAMBA TRINIDAD SANTA CRUZ TARIJA COBIJA SUCRE POTOSI Vallegrande - Yacuiba Camargo Puerto Suarez Larecaja Guarayamerín Interconnected System Isolated Systems

3 To establish the principles and rules to operate the electricity industry To establish favorable conditions for capital investment in the electricity industry To promote competition and efficiency in the activities of the electricity industry To regulate those activities that due to their nature are monopolistic To ensure adequate protection of the rights of consumers To achieve an efficient electricity service with appropriate quality To promote efficient operation, free access to the transmission and distribution installations To establish a tariff system that reflects the economic cost of an efficient electricity supply

4 Investment in the sector based on concessional financing granted by multilateral organizations (IDB, WB) and other bilateral Lack of initiatives to promote private investment Lack of competition Lack of efficiency in distribution Weak regulatory system Dependent on the political system Tariffs fixed with political criteria Accelerated growth in demand that requires doubling installed capacity every eight years Conflict of interests: The State exercises functions as provider of the service, policy maker and regulator

5 Capitalization Law N°1544 of 03/21/94 SIRESE Law N°1600 of 10/28/94 Electricity Law N°1604 of 12/21/94 Electricity Law Regulations S.D.N°24043 of 06/28/95 Operation of the Power Market Concessions, Licenses and provisional Licenses Use of public domain goods and right of way Prices and Tariffs Distribution Quality Infractions and Sanctions Transmission Quality S.D. 24711 of 07/17/97 Rural Electrification S.D. 24772 of 07/21/97

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8 ELECTRICITY LAW AND SECONDARY REGULATIONS

9 EFFICIENCYThis principle requires the correct and optimum assignment and utilization of resources for the supply of electricity at a minimum cost. TRANSPARENCY The public authorities responsible for the regulatory process, conduct those process in a public manner, assuring the access of information to every competent authority and to interested persons. QUALITYCompliance with the technical requirements set by the regulations. CONTINUITYSupply must be provided without interruptions. ADAPTABILITYAddition of technology and modern management systems to improve the quality and efficiency in rendering the services. NEUTRALITYRequires fair treatment for all electric companies and consumers.

10 GENERATION Generation in the National Interconnected System and generation for export, constitutes the production and sale of an intangible private asset. TRANSMISSION Transport of an intangible private asset DISTRIBUTION Public Service

11 GENERATION COMPANIES DISTRIBUTION COMPANIES TRANSMISSION COMPANIES DISTRIBUTION COMPANIES Maximum 35% of installed capacity in S.I.N. GENERATION COMPANIES TRANSMISSION COMPANIES DISTRIBUTION COMPANIES GENERATION COMPANIES TRANSMISSION COMPANIES NO

12 G1 G2G3 More Gen. T R A N S M I S S I O N C O M P A N Y DISTRIBUTION COMPANIES La Paz, CRE, ELFEC ELFEO, CESSA, SEPSA CONSUMERS G4 NON REGULATED CONSUMERS

13 General Superintendence Electricity Superintendence Vice-Minister of Energy Prices Fiscalization Concessions and Licenses Establish Norms Indicative Expansion Plan

14 Ensure compliance with the law and its regulations Promote competition and efficiency Protect rights of consumers Grant concessions and licenses Watch over the fulfillment of obligations and rights of concessions or licenses holders Establish rights of way for the exercise of the electricity industry Approve, publish and control, as applicable, maximum prices for regulated activities of the electricity industry Resolve complaints filed by consumers, regulated companies and State Supervise the operation of the Load Dispatch Center Put in the authorities knowledge any environmental contravention's

15 National Load Dispatch Committee Wholesale Power Market Contract Market Spot Market Rights and duties of the market agents Planning, operation and load dispatch in the market Firm capacity Marginal cost per node Transactions in the spot market Remuneration to the transport system

16 SPOT MARKET GENERATION CONTRACTS TRANSMISSION SUPPLY DEMAND Marginal Cost Hydroelectric Thermoelectric Free Prices Distribution Companies Non-Regulated Consumers National Load Dispatch Committee Coordination

17 SUPERVISION AND FISCALIZATION COORDINATION Electricity Superintendence NLDC To plan the integrated operation of the SIN To carry out the load dispatch in real time with a minimum cost To manage the transactions in the Wholesale Power Market

18 Generation licenses (indefinite) Transmission licenses (indefinite and non exclusivity) Provisional licenses (studies - 3 years term) Distribution concessions (40 years term) Activities free of concession or license granting Generation below 300 kw Self-production below 2000 kw Distribution by a self-producer who does not qualify as public service Requirements for obtaining a concession, license and provisional license

19 Procedure for granting concession, license or provisional license At request Public bidding License for import and/or export of electricity Concession and license contracts Caducity of concession and licenses Preventive intervention Free competition Adjustment of existing concessions to the law

20 Requirements for obtaining the right to use goods of public domain Protected area Right of way Opposition Compensation or indemnification criteria

21 Maximum price from generators to distributors Marginal cost Maximum transmission price Cost plus of a economically adapted system Maximum distribution price Price cap with efficiency factor Indexation formula

22 Implementation Stages Preliminary (one year): distribution companies must implement the methodology to measure and control quality standards Trial (6 months): to verify the applicability of quality standards Transition (24 months): to apply and comply with standards and to adjust its facilities Quality of services Quality of product (technical) Quality of service Commercial quality Distributor remuneration reductions Notification to the distributor Term to amend the causes of non-compliance Reduction calculation Reimbursement to consumers

23 Superintendence duties Third party denouncement Definition of infractions and penalties to the consumer Definition of infractions and penalties to the operators Proceeds of fines destined to finance rural electrification projects

24 Company To not fulfill the Electricity Law rules To not fulfill the S.E. rules To not fulfill NLDC rules FINES To carry out arbitrary connections To modify measurers To deny inspections to his installations Consumers Third Party To carry out activities in the electric industry without concessions and licenses To damage electric installations. FINES RURAL ELECTRIFICATION FINANCIAL Impose SANCTIONS Establish INFRACTIONS FINES 2nd. Superintendency process 1st. Company process

25 Behavior of the transmission Responsibility of the transmitter Responsibility of the users of transmission (generators, distributors and non regulated consumers) Measurement of transmission quality Responsibility of the transmitter Responsibility of the users Transmitter remuneration reduction Implementation Stages Preliminary (16 months): Implement the methodology to measure and control the quality Trial (one year): the penalties are reduced to 50% Regime: full application of the regulation

26 Remains as a State Responsibility Central Government Local Government Financing by State Multilateral and bilateral concessionary resources Private sector Prices and tariffs to cover only Operational cost Cost of external financing Return on private investment

27 Service Quality Control 1.Technical Products Assure regulated levels of tension,etc. 2.Technical Service To avoid that the frequency and duration of the interruption exceeds the permissible level. 3.Commercial Service To assure a suitable and diligent consumer attention Volt Ma x. Min. Assure the electricity supply and its expansion Promote competence and efficiency in the electric industry activities. Fair tariffs and prices Consumer complaints attention - Consumer office (ODECO)

28 What is ODECO? System of attention of reclamations Which are its objectives? To protect consumers To know through its reclamations the right application of the legal norms, and the fulfillment of the quality parameters.

29 General Superintendency Sectoral Regulatory System Claude Bessé ArzeAlgeria, April 10, 2001 For more information visit our Web Site www.sirese.gov.bo


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