On March 2, 2026, the Organic Law for the Strengthening of the Strategic Mining and Energy Sectors was published in the Fifth Supplement of the Official Gazette No. 234, through which the Organic Law of the Public Electric Power Service was amended. Below, we present the most relevant reforms:
Generation Systems for Self-Supply in Transmission or Distribution. – Now the Generation Systems for Self-Supply will be able to take advantage of any energy resource (previously they could only use renewable energies). Additionally, they can be connected to transmission and distribution networks. The Self-Supply System may be owned by the consumer or third parties, and third parties may be contracted for the financing, management, operation, surveillance, installation and maintenance of the system.
Incorporation of an Autonomous Energy District (DAE). – Legal entities may be authorized to own an electricity network that has electricity generation of any type of technology (whether local or remote) for their self-supply.
New causes for delegation to private initiative. – Two main categories are established for delegation to private initiative and their reasons for its delegation.
In the case of projects within the PME:
- When there are delays of more than 2 years, or risk of energy deficit, rationing, collapse, loss of reserve or security breach.
- When for technical or economic reasons public or mixed companies cannot comply.
- When there is a declaration of emergency in the electricity sector, with a reasoned report from CENACE.
- When private participation provides better economic or management conditions for citizens.
In the case of projects outside the PME:
- When technical or technological reasons justify projects that contribute to the PME and that cannot be executed on time by public/mixed companies.
- When the private initiative presents proven technologies not previously developed in the country.
In addition, the development of projects that use non-conventional renewable energies, transition energies, self-generation with any type of technology, autonomous energy districts, as well as the transmission and/or distribution systems that allow their incorporation, which are not included in the PME, may be delegated, subject to compliance with the requirements established in the relevant regulations issued by the Ministry.
Rules for delegation to private initiative. – Exceptional delegations to private initiative must be based on technical, economic and legal studies that justify their need. Despite delegating the execution, the State maintains the stewardship, regulation and control of the electricity sector, without transferring ownership of the public service.
The Ministry will establish limits on the entry of new generation projects each year according to the capacity and security of the system, with possible exceptions for self-sufficient or strategic industrial projects.
Concession contracts may last up to 40 years, with a single exceptional renegotiation supported by technical, economic and legal reports.
Real rights over the concession and guarantees. – The enabling title grants its holder a real right over the concession and the assets and resources it generates, allowing him to use all available legal mechanisms to guarantee payment to his financiers or creditors.
The possibility of using fiduciary mechanisms, guarantees, pledge of rents and assignment of accounts receivable, among others, is expressly recognized, which will be regulated by the corresponding regulations. Any guarantee mechanism must always ensure the continuity of the project.
In addition, the liens imposed in favor of lenders must be notified to the Ministry for their validity and opposition to third parties.
Finally, secured lenders or creditors must enter into direct agreements with the Ministry to ensure the continuity of the project in the event of a default.
Reversion of affected assets. – All assets of the private initiative corresponding to projects that are not part of the PME are added as a new exclusion from the reversion of affected assets.
Obligation of self-generation or self-sufficiency for the oil or mining industry. – It is established that, in the enabling titles, concession contracts or exploitation of the mining or oil industry, clauses must be included for local or remote self-generation or self-sufficiency.
Economic dispatch. – CENACE will carry out the dispatch of the generation plants considering the variable costs of production based on the international price of fuels, which must be declared by each generator and audited by CENACE. The generation of non-conventional renewable energy of up to 10 MW will have preferential dispatch. Similarly, a minimum dispatch of generation plants that use transition energies (e.g. natural gas) is established.
This information is a summary of legal developments of interest, and therefore cannot be considered as provided advice. If you have any questions, please contact the AVL team.