ARGENTINA Law and Practice Contributed by: Héctor Pozo Gowland, Esteban de Vedia, Carlos Ernesto Miná and Francisco Pozo Gowland, Pozo Gowland Abogados
1. Structure and Ownership of the Power Industry 1.1 Law Governing the Structure and Ownership of the Power Industry Privatisation of the Power Industry and Sanction of the Regulatory Framework During 1989, privatisation took place in relation to many of the assets the national government had in the power industry, including the units of generation, transportation and distribution of energy. At the beginning of the 1990s, the national government called different tendering processes for the selling of the aforementioned assets. In addition to this, several regulations were passed, such as Law No 24,065, its Regu- latory Decree 1398/1992, and Resolutions Nos 61/92 and 137/92 (and their complementary ones), issued by the Secretary of Energy, that establish the operation programming proce- dures, the dispatch of loads and the calcula- tion of prices in the wholesale electricity market (regulations known as “the Procedures”), as well as other provisions issued by the same Secre- tary and the National Electricity Regulatory Entity ( Ente Nacional Regulador de la Electricidad , or ENRE). This legislation, together with Law No 15,336, which had been issued previously, make up the Regulatory Framework for the Electricity Industry. Structure of the Energy Industry Under Law No 24,065, the power industry is divided into three segments: (i) generation, (ii) transportation, and (iii) distribution, with gen- eral and specific regulations for each segment, as well as limitations on the right to participate simultaneously in these segments (see 2.4 Mar- ket Concentration Limits ).
Generation Generation is defined as an activity of general interest, to which free competition rules apply. However, the activity is controlled by the national government, due to its importance in terms of general interest. Control over generation activity ensures its correct functioning and, ultimately, guarantees the supply to residential, commercial and industrial users. Transportation The transmission of power is a public service, which is provided by certain companies that have signed a concession contract with the national government. In addition to the conces- sionary carriers, there are independent carriers, companies that are in charge of the operation and maintenance of a transportation line that was built after the privatisation of the industry, and that do not fall under the responsibility of a concessionary carrier. Distribution Distribution of electric power is a public service. Unlike transportation companies, which are all bonded with a concession contract with the national government, distributors can be divided into two groups: (i) Edenor and Edesur, which carry out the service in the City of Buenos Aires and in Greater Buenos Aires, and have signed a concession contract with the national govern- ment given the inter-jurisdictional nature of the service; and (ii) the provincial distributors, which do not perform an inter-jurisdictional service and do not sign a concession contract. Provincial governments control their regime tariff and con- trol the service. However, provincial distributors are also subject to the control of the national government (ENRE and the Secretary of Energy) with regard to the purchase of energy to supply users.
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