Draft bill 73.

Summary.

The draft bill amends Law 6 of 1997 to expand the purposes of state regulation. It makes the purchase of voltage protection or regulation devices voluntary for end customers, provides for energy policy adjustments coordinated with the Energy Secretariat (Secretaría de Energía), and contemplates regulatory sandboxes. It recasts the instruments of supervision and defines technical fitness, the organized and unorganized private sectors, the fair market value of distribution company shares, and the competent regulatory authority.

It assigns the regulator annual assessments of distribution companies, technical and economic oversight, financial audits, sanctions, and publication of studies on generation. Assessments would incorporate views from residential customers and the commercial, industrial, hotel, agricultural, health, and education sectors; they would consider customer service, continuity, backup service, tariffs, investment, maintenance, and sanctions. A platform would receive complaints and claims digitally or in person, with permanently public information. The draft sets weights for this participation and would make the results binding when determining distributors’ eligibility for concessions. The Executive Branch (Órgano Ejecutivo) would regulate the methodology. Service providers would publish audited financial statements each year. Repeated quality failures would bar participation in share sale processes, while adverse assessments, breaches, and certain penalties could terminate a concession.

For generation, the bill limits interests in distributors and participation in new concessions, licenses, and power or energy procurement according to demand and consumption shares. It orders economic dispatch by variable cost and permits exceptional price caps in the spot market, with reference to the Civil Code (Código Civil). Distributors would have to maintain service quality and networks, expand coverage, coordinate expansion with local authorities, publish tariffs and quality indicators, measure actual consumption, give notice of inspections, invest in smart grids, and repair or pay for damage attributable to service deficiencies. The National Authority for Public Services (Autoridad Nacional de los Servicios Públicos) would prepare and award power or energy procurements using reference prices. Special tender documents would reflect demand and policy guidelines from the National Energy Secretariat (Secretaría Nacional de Energía). The bill provides for tariff reductions when quality limits are breached, automatic interruption alerts through an addition attributed by Art. 16 to Law 5 of 1997, and public lighting duties. It also restricts certain distributor activities, competition practices, and outsourcing.

For rural electrification, the Executive Branch would plan projects and allocate resources; the Rural Electrification Office (Oficina de Electrificación Rural) would carry out projects and select and train providers. The bill regulates project selection, cost coverage, and subsidy methodology set by the National Authority for Public Services. The Rural Electrification Fund would receive electricity market participants’ contributions and budget allocations, with stated exceptions for large customers and certain plants. The Rural Electrification Office could use the money for projects and operating expenses, issue the clearance certificate required for tax incentives, and request that the Ministry of Economy and Finance (Ministerio de Economía y Finanzas) reserve unused balances. A separate fund, financed by fines for quality violations, would pay for rural service improvements throughout the Republic of Panama (República de Panamá); fines would not replace the duty to repair damage. The bill sets collection rules, surcharges, contracting and oversight procedures, and tariff treatment for those works, as well as a tax exemption for the Rural Electrification Office.

On tariffs, it changes transmission cost recovery and the calculation of distribution value added, with rates of return based on the cost of capital and United States of America (Estados Unidos de América) Treasury bonds. The regulator would deduct operation and maintenance resources included in tariffs but left unused. Large customers could negotiate supply with generators or marketers. Customer inquiries and complaints would have a response deadline; billing and meter disputes would have deadlines for resolution and filing with the National Authority for Public Services. Disputed bills would be suspended without interest or disconnection for their nonpayment while the claim is decided. The text lists the amendments and additions to Law 6 of 1997 and provides for commencement on the day after promulgation, with separate dates for the tariff changes.

The public bodies involved are the Executive Branch, the National Authority for Public Services, the Energy Secretariat, the National Energy Secretariat, the Rural Electrification Office, and the Ministry of Economy and Finance. The provisions could affect or interest distributors, generators, marketers, electricity market participants, large customers, households, businesses, industries, hotels, health and education facilities, and rural communities.