Bill 729.

Summary.

The bill amends the consolidated text of Law 6 of February 3, 1997 to distinguish generation, transmission, distribution and electricity retailing, and to address distributed generation and efficient energy use. It expands definitions covering market participants, eligible customers, retailers, prosumers, net metering and annual regulated revenue. Transmission and distribution operators would submit binding five year network modernization, expansion and maintenance plans for annual review by the National Public Services Authority (Autoridad Nacional de los Servicios Públicos). The Authority would issue a reasoned decision within 60 calendar days; expiry of that period would not approve a plan. It would publish quarterly quality and availability indicators, including SAIDI and SAIFI for distribution, and use an auditable procedure to assign responsibility for outages. It could order remedial plans following noncompliance.

The Authority would gain powers to audit market participants, access their systems, order automatic customer compensation, supervise independent retailers and publish quarterly statistics. Its electricity regulation and technical independence would undergo an annual external audit, with findings reported to the Commerce and Economic Affairs Committee (Comisión de Comercio y Asuntos Económicos) of the National Assembly (Asamblea Nacional). The bill separates decision making roles in energy policy, regulation and state shareholder representation. The Executive Branch (Órgano Ejecutivo) would issue incompatibility rules within six months. State representatives on company boards would have to demonstrate relevant qualifications and experience; serving ministers and deputy ministers could not hold those positions.

Distribution concessions would retain their 15 year term and the competitive process held before expiry to sell a shareholding of no less than 51%. New tender documents and contracts would specify service quality targets, verifiable investment, maintenance and customer service capacity, and guarantees. The valuation methodology would be published at least six months before the call for bids; an independent valuer and technical and financial prequalification would be required. The Authority could exclude financially unsustainable bids and, after proceedings respecting the right of defence, bar concessionaires covered by specified final decisions or penalties from the next process. Share acquisition costs could not enter the regulatory asset base or tariffs.

Independent electricity retailing would require a licence. Distributors also engaged in retailing would separate their accounts, functions, information systems and billing within six months. The National Dispatch Centre (Centro Nacional de Despacho) would continue integrated system operation within the transmission company, with technical and functional independence, administrative separation and publication of dispatch decisions and associated costs. Its structure would be adapted within 12 months. Distribution networks would provide neutral access to eligible customers, retailers, generators and prosumers. A Commercial Conduct Code (Código de Conducta Comercial) would govern information, customer data and switching. Customers with demand of at least 100 kW could initially choose a retailer; the threshold would fall to 50 kW from the second year, with possible further expansion from the third year. A platform run by the National Dispatch Centre would enable switching within 48 hours and begin operation within 18 months. A supplier of last resort would serve each concession area.

Tariffs would identify energy, network, retail and integrated operation charges separately. Distribution charges would apply equally regardless of the chosen retailer. Specified excess costs arising from noncompliance, purchases contrary to competitive procedures, unjustified network constraints and inefficient management would be excluded. Eligible customers could negotiate supply terms. The bill prohibits unjustified switching barriers, discriminatory network access and the use of network information to favour affiliated retailers. The Authority would establish a specialist complaints unit with electronic case files. It would decide complaints within 30 calendar days, extendable once for the same period; certain quantifiable claims would be deemed granted upon expiry, subject to the stated conditions.

New offences would cover failures to meet investment or remedial obligations, obstruction of audits, discrimination, breaches of activity separation and manipulation of information. Offences would be classed as minor, serious or very serious. Fines would be based on annual regulated revenue or, for competitive activities, gross revenue from the electricity activity. Proceeds would go first toward compensating affected customers. Customers could install clean renewable distributed generation. The bill sets capacity categories, interconnection procedures, net metering, credits, sales of surplus electricity, and community and remote arrangements. Minimum hosting capacity would be 16% of annual peak demand and 5% of maximum annual consumption. The Authority and distributors would publish data every six months.

Distributors and independent retailers would each devote 0.5% of the respective revenue specified in the bill each year to energy efficiency programs. These would offer consumption information, assessments and guidance for customers, small and medium enterprises, jointly owned properties and condominiums. The minimum contribution could not be charged to customers separately. A reasonably explained fall in consumption alone would not justify opening an irregularity investigation. Annual reports and oversight would be coordinated with the National Energy Secretariat (Secretaría Nacional de Energía). The provisions would concern electricity companies, customers, cooperatives, businesses and residential groups in Panama.