Regarding energy matters, there are two facts on the table. The first lies in the changes made to Law No. 6 of 1997, which sets out the regulatory framework for providing electricity service. The amendments to the legislation seek to improve the quality of electricity distribution service and “democratize contracting.” Yesterday, it was approved in the first discussion unanimously by the representatives who make up the committee. This is a sensitive issue, as many sectors confirm that it requires a broad discussion, without any surprises, and with the participation of all concerned parties, as happened at the beginning, and not a discussion in the middle of an electoral period.
The second matter is the specifications issued by the Electricity Transmission Company (ETESA) for purchasing renewable energy and energy for a period of 20 years. Both cases are widely reported to be occurring just three weeks before the presidential election, which doesn’t look very good for the business already familiar with the matter, which disputes the timing of both cases.
Yesterday, the head of the National Assembly’s Committee on Trade and Economic Affairs, Roberto Abrego, noted that amendments to 42 articles of Bill 1119 had been approved unanimously. He also pointed out, despite the closure of the first discussion, that there is an open period for economic actors and affected sectors to submit their contributions in the second discussion, as it is customary to present this type of considerations in the first discussion. The head of the authority said: “This is a mission aimed at achieving quality service, reasonable prices, and monitoring what is consumed and produced, in addition to monitoring other distortions.”
But it did not convince the Energy Union representative who claimed that the changes include new market figures, such as storage, a new element in the energy chain that must also be regulated by the Public Services Authority (Asep). Moreover, he said: “What is being discussed is the business of those who were in the case, but they are not meeting the needs of the population.”
Although the amendments aim to legislate quality, “the price is specified in tenders and not in the law,” as a person linked to the sector who requested anonymity explained. In fact, he opined that “the regulatory body has enough tools to require distributors to make the necessary improvements. It is true that the law must be updated, but it must be done in depth and not in the middle of an election period.”
The Chamber of Commerce spoke the same tone regarding the discussion. In a memorandum addressed to Abrego, he requested the suspension of the project that affects the entire economic life of the country, as well as the political and social life that seeks to provide efficient and continuous electric power service less than a month before the change of government. The memo said: “At this time, it is not appropriate to add such a delicate factor to the national agenda, as political forces are engaged in a complex electoral competition, which makes adequate and broad consultations futile.”
Among those who disagreed with the model was Juan Oriola, the former energy minister consulted by this outlet, who, although he agreed that the law should be revised to modernize it, “they should not do it the way they are doing it,” he said. . “They mention a few companies to participate, although the first discussion should be a process involving all sectors,” he added. Oriola stated that for these considerations, “ACEP and the Ministry of Energy met with two or three large companies.”
In the second case, the procurement of renewable energy with an expiration of 2046, those consulted for this article wonder why there was a rush to issue the contract just days after the government left, since the opening of the envelopes is scheduled for June 27 and the publication of the award on July 31. It is also incomprehensible why this is the right time to submit bids, if the first generation contract will start in 2026 with 200 MW, then in 2028 with 250 MW, and in 2029 with 500 MW. We have consulted Etesa, but at the time of writing this report it had not yet sent a response to a questionnaire from La Estrella de Panamá.
They see no benefit in pegging the rate for 20 years, especially in the case of solar power generation, a technology that is advancing by leaps and bounds and also suggests rates have been falling over the years. A source familiar with the sector noted: “They bind us to a 20-year contract, while the price can be reduced within 5 years.” This person added that although interviewees praise renewable energy contracts, they stress that they should be shorter, and “there will certainly be many more bidders” by the time the new tenders are proposed. The other idea is to review the offered price within 5 years, or a shorter period, to bring it in line with the market.
As a result of the era, Oriola describes, “many speculators applied for wind power without having a dime in their pockets.” Oriola’s statements illustrate a scene of speculation, as he added that whoever owns the license, or is about to complete the process, will sell it. “Those who enter the market have to buy that piece of paper to participate without knowing whether they will win the contract. It is the results of this improvisation. I do not see the necessity,” he concluded.
(Marks for translation) Juan Oriola
