On November 27, 2024, after 16 months of legislative process, the Chamber of Deputies approved the bill titled "Amends the General Electricity Services Law on Energy Transition, Positioning Transmission as an Enabling Sector for Carbon Neutrality" (hereinafter, the "Bill"), Bulletin No. 16.078-08, unanimously endorsing Senate amendments and preparing it for enactment by the Executive.

Despite its title referencing energy transition, the approved provisions focus solely on modifications to the transmission segment. These measures aim to expedite the development of transmission projects, particularly those declared void in tenders or abandoned during construction due to unrecognized cost increases. Additionally, the Bill introduces rules modifying zonal transmission payment mechanisms to provide economic incentives for power plant installations.

Specifically, the Bill includes a series of amendments to the General Law of Electric Services, introducing 10 modifications and 5 transitory articles to the law.

The modifications are as follows:

1. Article 77 Amendment: The first article of the Bill modifies the definition of zonal transmission systems in Article 77, allowing the supply of regulated demand to include storage systems.
2. Article 87 Amendment: The second modification addresses Article 87, permitting regulations to establish differentiated criteria for achieving the objectives outlined for the expansion of zonal transmission systems.
3. Article 91 Amendment: Article 91 is amended to incorporate the possibility of granting execution guarantees for proposals originating from specific generation projects or energy systems not yet declared under construction.
4. New Article 91 Bis: The Bill introduces a new Article 91 Bis, concerning urgent and necessary works. It defines the procedure for classifying works as urgent and necessary, exempting them from the planning process. These works must not exceed 10% of the average value of the last five transmission planning processes, with new works capped at 5%. The article also details the process for declaring works as urgent and necessary, with specific requirements and conditions to be established by regulation.
5. Article 95 Amendment: The Bill replaces Article 95 regarding tender bases for new and expansion works. It establishes that new works will be tendered by the National Electric Coordinator, while expansion works will be tendered by property owners. It also includes provisions for cases where tenders are declared void or where early termination of awarded contracts for expansion works occurs.
6. Article 96 Amendment: The sixth modification revises Article 96, concerning decrees related to the execution and operation of new works and the construction of expansion works, including property owners as tenderers and adjusting the investment values for expansion works.
7. Article 99 Amendment: The seventh modification amends Article 99 on payment for expansion works. It incorporates provisions for urgent and necessary works excluded from planning and establishes procedures for early termination of expansion works.
8. Article 102 Amendment: The eighth modification adjusts Article 102 on transmission tariffs to align with the new regulations. It states that urgent and necessary works will be treated as existing works for valuation purposes and classified into transmission system categories until the next evaluation (every four years). It also allows generation companies to propose and finance expansion works.
9. Article 114 Amendment: The ninth modification updates Article 114 on transmission remuneration. It integrates actual tariff revenues into the single-use charge and considers payments by generation and storage systems for zonal transmission use.
10. Article 115 Amendment: The final modification revises Article 115 on transmission payments, replacing subsection (b) of the first paragraph to deduct payments made by generation and energy storage systems connected to distribution networks from zonal transmission use charges.

The transitory provisions address the timelines for enacting or amending regulations once the law comes into effect (First Transitory Article), the possibility of reviewing the investment value of expansion works awarded as of the law's effective date (Second Transitory Article), the temporary nature of early termination of expansion works (Third Transitory Article), the transition of expansion work tenders (Fourth Transitory Article), and, finally, the eligibility of necessary and urgent works for the Ñuble Region (Fifth Transitory Article).

The Bill is pending promulgation by the President of the Republic.

For more information, contact Francisco López Díaz (flopez@jdf.cl) or Sofía Ortúzar (msortuzar@jdf.cl).