Today the Energy Regulatory Commission (Comisión Reguladora de Energía) (“CRE”) published in the Federal Register the Resolution number RES/1094/2020 amending the general administrative provisions establishing the terms to request the authorization for the amendment or transfer of generation or electricity supply permits (the “Resolution”) that were originally established under resolution number RES/390/2017.

The Resolution limits the possibility of including new load centers as authorized offtakers in self-supply generation and cogeneration permits governed by the Electric Power Public Utility Law (Ley del Servicio Público de Energía Eléctrica) (“LSPEE”).

The inclusion of new offtakers was previously expressly authorized under RES/390/2017 (except for load centers required to be registered at the Qualified Users Registry (Registro de Usuarios Calificados)); however, under the new Resolution, self-supply generation and cogeneration permits may only be amended to include new authorized off-takers provided such off-takers are already included in the expansion plans authorized under the relevant permit, and then only to the extent (i) no supply agreement under the Electricity Industry Law (Ley de la Industria Eléctrica) (“LIE”) has been entered to serve the relevant load centers; and (ii) such load centers were not required to be registered at the Qualified Users Registry. Moreover, the Resolution provides that the impediment to include such load centers in any self-supply generation and cogeneration permit will remain even after the supply agreement entered under the LIE or the registration a the Qualified Users Registry are no longer effective.

The CRE argues that the provisions previously established in RES/390/2017 failed to provide clarity on the way in which self-supply and cogeneration permits granted under the LSPEE were intended to continue developing their activities, which in principle were aimed at satisfying the needs of the shareholders/members of the company holding the self-supply generation permit or the beneficiaries of the cogeneration facilities.

In the CRE’s view, allowing permit holders to amend their permits to include a) new off-takers that were not shareholders when the permit was granted or were not included in the expansion plans of the relevant permit; and b) load centers that had previously entered into supply agreements under the LIE and were later on included as off-takers under self-supply or cogeneration permits, distorted the nature and purpose of the self-supply and cogeneration permits and created a special regime that gave the holders of those permits an advantage against permit holders competing under the LIE’s market scheme.

The Resolution establishes that the holders of self-supply and cogeneration permits may continue performing their activities under the terms of the LSPEE, and the changes introduced by the Resolution will not retroactively apply to those off-takers included in self-supply and cogeneration permits under amendments previously approved by the CRE.