NEW ORGANIC LAW OF ELECTRIC ENERGY AS PUBLIC SERVICE OBJECTIVES TO GUARANTEE • that public electricity service meets the cons4tu4onal principles of obliga4on, generality, consistency, responsibility, universality, accessibility, regularity, con4nuity, quality, environmental sustainability, precau4on, preven4on and efficiency. TO SET STANDARDS • of the State´s responsibility to plan, implement, regulate, control and manage public electricity service. TO REGULATE • the par4cipa4on of public and private sectors related to public electricity service ac4vi4es, as well as the promo4on and implementa4on of plans and projects with renewable energy sources, and establishing mechanisms for energy efficiency. RIGHTS AND OBLIGATIONS OF USERS RIGHTS OBLIGATIONS ▪Receive public electricity service according with cons4tucional principles. ▪Receive a commercial invoice in accordance to consump4on; ▪Complain to the power company in case of improper public service received or invoiced amounts; and receive a 4mely response; ▪Be 4mely informed on charges to be applied to consump4on; ▪ Be treated equally, and not in a discriminatory or abusive manner in the provision of public electricity service. ▪Pay the electricity bill 4mely; ▪Use electricity power efficiently ; ▪Care for electrical installa4ons that allow having electricity and report those who make incorrect use of this public service. DUTIES OF THE STATE ▪ Meet the needs of the public service of electricity and overal ligh4ng of the country, in accordance with the Na4onal Development Plan, the Master Plan for Electricity and other applicable sectoral plans. ▪ Provide electric public service through public companies or joint ventures with a majority stake, and may excep4onally delegate to the private sector. ▪ Make decisions regarding planning, construc4on, installa4on, maintenance, opera4on and sustainable development of electrical systems in order to meet the needs of the electricity public service. NEW STRUCTURE OF THE ELECTRICITY SECTOR Ministry of Electricity and Renewable Energy (MEER) Governing and planning body of the electricity sector. It defines and implements policies, assessing regula4on and control; iden4fies and tracks project implementa4on; grants authoriza4on 4tles; promotes and implements plans and programs for renewable and efficiency energy The Agency for RegulaLon and Control of Electricity (ARCONEL) The Operator of NaLonal Electricity. (CENACE) Public, Mixed, Private, Popular Strategic technical body aWached to and Solidarity Economy Technical-­‐Administra4ve the MEER. Technical operator of the Enterprises; ConsorLums and Agency in charge of regula4ng Na4onal Interconnected System AssociaLons and controlling. Has the power (SNI) and commercial transac4ons manager, responsible for the to set tariffs and impose con4nuous supply of energy supply. sanc4ons. Does not exert Does not exercise business ac4vi4es business ac4vi4es. in the electricity sector. BUSINESS SECTOR PUBLIC COMPANIES The MEER may authorize public companies for genera4on, transmission; distribu4on and marke4ng, import and export of electricity and general ligh4ng service (GENERAL RULE). MIXED ECONOMY COMPANIES The MEER may authorize mixed companies in which the State has a majority shareholding, for genera4on, transmission, distribu4on and marke4ng, import and export of electricity; and general ligh4ng service when projects and ac4vi4es can not be carried out by public enterprises. PRIVATE COMPANIES AND POPULAR AND SOLIDARITY COMPANIES The MEER may excep4onally delegate to private equity firms as well as popular and solidarity economy companies, when: 1. There is a need to meet the public, collec4ve or general interest; 2. The service demand cannot be met by public or joint ventures; 3. In the case of projects using non-­‐conven4onal renewable energy that is not in the Master Plan of Electricity ENABLING TITLES AUTHORIZATION OF OPERATION CONCESSION CONTRACT • The MEER shall process and issue the respec4ve opera4ng authoriza4on for the implementa4on, opera4on and performance of projects developed by public en44es and joint ventures. • The MEER shall subscribe concession contracts with private companies and those of popular and solidarity economy, whose projects have been included in the PME, or those not confirmed in the PME which have been proposed by the aforemen4oned companies, observing the rules issued to the effect. CONCESSION CONTRACT SELECTION • The MEER shall perform selec4on processes for projects under the PME. TERMINATION • All property assigned to public service must be reversed and forcibly transferred to the Ecuadorian State without cost. TERMINATION • The MEER may terminate the Contract by any of the eight grounds men4oned in the Law. EXPIRATION DISPUTES • There are 13 causes of Expira4on of the Contracts. • They may be submiWed to the judges of Ecuador or for regional arbitra4on. PARTICIPATION IN THE ELECTRICITY SECTOR GENERATION MAJOR CONSUMERS DISTRIBUTION AND MARKETING AUTOGENERATION TRANSMISSION OPERATION OF THE ELECTRICITY SECTOR INTERNATIONAL INTERCONNECTIONS SHORT TERM TRANSACTIONS REGULATED CONTRACTS TRANSACTIONS OF ENERGY BLOCKS PROGRAMMING OF THE OPERATION ECONOMIC DISPATCH COMMERCIAL LIQUIDATION UTILITIES Electricity GeneraLng Private Companies • From the profits obtained in the opera4on phase: • 3% are des4ned for their workers; and, • the remaining 12% for territorial development projects in the area of influence. • The alloca4on criteria of projects and the period shall be determined in the regula4ons of the law. TARIFF REGIME The tariff will be standard in all the na4onal territory according to consump4on paWerns and levels of tension. Tariff schedules shall be prepared by ARCONEL under principles of solidarity, equity, coverage costs, energy efficiency, social and environmental responsibility. ARCONEL, in the first half of each year, shall determine the costs that are applied in electronic transac4ons for the determina4on of tariffs for the final user for the subsequent year. TARIFFS ARCONEL may set tariffs that promote the development of basic industries, considering the use of renewable energy, at compe44ve and stable prices, or subsidies, if necessary, and tariffs to achieve the efficient use of energy. RENEWABLE ENERGY AND ENERGY EFFICIENCY RENEWABLE ENERGY ENERGY EFFICIENCY • Dis4nc4on between conven4onal and non-­‐
conven4onal renewable energy. • Projects using this energy shall receive incen4ves and preferen4al treatment. • The appropriate permit from the Environmental Authority is needed. • Achieve greater efficiency in energy consump4on, especially in the electrical system. • The MEER shall adopt policies and shall promote projects through incen4ves or punishments.