In the context of the investigations into the events of February 25, 2025, which resulted in a total blackout of the National Electric System (SEN), the electricity regulations establish a series of investigative and sanctioning measures to be carried out by the Superintendency of Electricity and Fuels (SEC), which is the competent authority in this matter.
One of the most immediate institutional responses within the system concerns the economic compensation procedure for end users, in which the National Electric Coordinator (CEN) plays a key role. The CEN is responsible for issuing the Failure Analysis Study (EAF), which will be crucial for the investigation and sanctioning process, and particularly essential for imposing "economic compensation."
Since the CEN submitted the EAF report to the SEC on March 18, 2025, in compliance with the legal mandate established in Article 72°-20 of the LGSE, it is now necessary to analyze its content and main implications.
- FAILURE ANALYSIS STUDY
The EAF is a report mandated by the LGSE to be prepared by the CEN in the event of a failure in electrical facilities not intended for distribution that have caused supply unavailability for end users beyond the established regulatory standards.
The purpose of the EAF is to provide, in a timely and adequate manner, the necessary background information for the SEC to carry out its investigative duties and, if applicable, impose sanctions on those responsible for the supply interruption.
The failure analysis indicates that the event was triggered by an unauthorized intervention in the communication systems of the differential protection (function 87L) on the 2x500 kV Nueva Maitencillo – Nueva Pan de Azúcar Line, which rendered the line inoperative at 1:35 PM. This intervention caused the unexpected opening of both 500 kV circuits, leading to the separation of the national electric system into two electrical islands due to the sudden increase in energy transfers. This overloaded the parallel 220 kV system and ultimately caused a total blackout.
Following the blackout, the National Electric System Coordinator (CEN) implemented the Service Recovery Plan (PRS) within minutes of the event. However, delays occurred in the application of the Service Recovery Schemes (ERS), primarily due to the loss of remote control and SCADA signals from key companies involved in system normalization. These issues prevented the Coordinator from visualizing the necessary systemic variables, making service recovery more challenging. The lack of SCADA system visibility and communication difficulties were the main causes of the PRS delays.
- SANCTIONING PROCEDURE
As a functionally decentralized public service responsible for supervising compliance with legal, regulatory, and technical standards in electricity transport, the SEC is the competent authority to initiate, investigate, and potentially sanction companies responsible for the total blackout.[1].
The SEC’s sanctioning powers are outlined in Law 18.410, the LGSE, and its respective regulations. The procedure is governed by Decree No. 119 of 1989 from the Ministry of Economy, which establishes the regulatory framework for sanctions in electricity and fuel matters.
However, in the specific case of a blackout, in parallel with the general sanctioning process for violations of electricity regulations, the LGSE establishes a special procedure and sanction aimed at determining economic compensation for the supply unavailability.[2].
Therefore, two sanctioning procedures must be considered:
- Economic Compensation for Supply Unavailability
Economic compensation is a sanction imposed for any event or failure in electrical facilities not intended for public distribution service that causes supply unavailability for end users, is unauthorized by law or regulations, and falls outside the standards set in the Technical Standards referenced in Article 72°-19 of the LGSE.
This sanction and its application procedure are established in Article 72°-20 of the LGSE.
In cases of supply unavailability due to transmission failures affecting regulated customers, the law stipulates compensation equivalent to fifteen times the tariff of the unsupplied energy, with a per-event cap of 5% of annual revenue for transmission companies.
For implementation, once a failure occurs, the Coordinator must prepare an EAF report and submit it to the SEC within the legally established deadline, which is 15 business days from the occurrence of the failure.[3].
Entities involved may submit observations on the EAF to the Superintendency within ten days of its submission, along with any supporting documentation they deem relevant. If the SEC determines that compensation payments are warranted, it will instruct the suppliers of affected end users—whether public distribution concessionaires or generators—to apply the compensation in the next billing cycle or as determined by the Superintendency.
Once the compensations have been paid and the immediate cost assumed by the suppliers of the affected users, the SEC will instruct the Coordinator to order the responsible party to fully and immediately reimburse the compensations paid by the suppliers.
Lastly, the law allows facility owners or operators to contest the obligation to pay, the assigned amount, or the apportionment methodology.
- General Sanctioning Procedure under Law No. 18.410 and Decree No. 119
Liability for violations and non-compliance with legal, regulatory, and technical provisions related to electricity, whether causing the failure or occurring afterward, is determined through the sanctioning procedure established by Law No. 18.410, which created the SEC, and Decree No. 119 of 1989 from the Ministry of Economy.[4].
The SEC’s investigation may be initiated ex officio or based on complaints or claims from third parties. Specifically, the SEC will initiate proceedings when, in exercising its functions and without the need for a formal complaint, it becomes aware of violations, non-compliance, or breaches of electricity, gas, and liquid fuel regulations.
At the conclusion of the investigation, the SEC will determine whether liability exists, and if so, issue a reasoned Resolution classifying the violation and imposing a sanction on the responsible party.
It is important to note that the Coordinator has submitted the EAF to the SEC, enabling the agency to take appropriate action.
- POTENTIAL VIOLATIONS AND NON-COMPLIANCE
As highlighted, the EAF report is a crucial instrument for imposing economic compensation on those responsible for the failure and provides essential information for the SEC’s investigation in a potential sanctioning procedure.
It should be emphasized that “Entities coordinated by the CEN are individually responsible for compliance with obligations arising from the law, regulations, technical standards issued by the Commission, and procedures, instructions, and programs established by the Coordinator.”
- ASSOCIATED SANCTIONS
Violations and non-compliance with legal, regulatory, and technical standards in the electricity sector, as well as with instructions and orders issued by the Superintendency, are subject to sanctions established in the regulations on electricity sanctions (Decree No. 119), Law 18.410, or the LGSE itself.[8].
According to these provisions and considering the February 25 event, if the SEC determines responsibility for the supply unavailability, it would apply the economic compensation sanction provided in Article 72°-20 of the LGSE.
In parallel, if the EAF provides sufficient evidence, the SEC may initiate an ex officio sanctioning procedure to establish liability and apply other sanctions prescribed by law for violations of electricity regulations.
Beyond the sanction for the non-compliance that caused the failure, this procedure could also investigate and penalize other infractions, such as failures in information duties, security, and coordination, which contributed to delays in system recovery.
Thus, the electricity regulations provide for a range of sanctions beyond compensation, ranging from censure to fines of up to 10,000 UTA. In determining the sanction, the SEC must consider various factors, including the impact of the regulatory breach, the number of affected customers, and the disruption to service regularity and quality.[9].
Ultimately, the determination of liability and imposition of sanctions will depend entirely on the SEC’s investigation and its assessment of the events of February 25, 2025. The recently issued EAF from the CEN will play a fundamental role in this process.
Finally, it should be noted that any sanctions imposed by the SEC may be subject to various administrative or judicial appeals.
For further information, please contact Francisco López (flopez@jdf.cl) or Eduardo Silva (esilva@jdf.cl).
[1] Artículo 1,2 y 3 de la Ley N°18.410; Artículo 7 del Decreto N°119 de 1989 del Ministerio de Economía.
[2] Artículo 72°-20 de la LGSE.
[3] Artículo 6-74 de la NT.
[4] Artículo 321 del Reglamento de la LGSE.
[5] Artículo 2 del Decreto N°119.
[6] Artículo 12 del Decreto N°119.
[7] Artículo 72-14 de la LGSE.
[8] Artículo 321 del Reglamento de la LGSE en relación con el artículo 72°-20 de la LGSE.
[9] Artículo 4 del Decreto N°119. ; Artículo 14, Ley 18.410
