This is a first in a series of posts to understand the status of this critical legislation.
Venezuelans continue to struggle with prolonged blackouts and electricity rationing. Meanwhile, potentially important legislation designed to open the electricity sector to private investment is sitting in the National Assembly awaiting its second discussion, which Delcy Rodriquez now says will be occurring in a matter of weeks and no later than end of year.
On June 2, the National Assembly unanimously approved in first discussion a partial reform of the Organic Law of the Electrical System and Service. The proposal would amend 42 provisions and potentially allow private and mixed-capital participation across electricity generation, transmission, distribution and commercialization.
This represents a significant departure from the highly centralized model built around state-owned Corpoelec.
The legislation subsequently went through public consultation and consideration by the National Assembly’s Permanent Commission on Administration and Services. The next major step should be its second discussion, when legislators consider and vote on the legislation article by article.
But that hasn't happened.
The irony is difficult to ignore: while the country struggles with electricity shortages, Nearly four months after the first vote, there is still no public timetable for the second discussion.
One legislator trying to move things along is Deputy Reinaldo Sifuentes 1, a member of the Administration and Services Commission. Sifuentes has repeatedly called for the Assembly to resume consideration of the reform. He argues that Venezuela cannot finance the enormous rehabilitation of its electricity infrastructure entirely with public resources and needs to create conditions for private investment.
Sifuentes estimates that Venezuela currently has approximately 12,000 MW of available electricity against demand approaching 15,000 MW, leaving a roughly 3,000 MW deficit. These are his estimates rather than independently verified national statistics.
Other experts question whether the proposed reform goes far enough. Venezuelan electricity specialists have raised questions about tariffs, regulation, investor protections, Corpoelec’s future role and whether the proposed framework would actually attract the billions of dollars of private investment required 2.
That leaves some important unanswered questions.
Has the commission completed the final text? 3 Is there disagreement over private ownership, tariffs or concessions? Does the Executive support moving forward now? Who must formally place the legislation back on the Assembly agenda? And, ultimately, who has the power to move it forward?
With Venezuelans continuing to endure serious electricity shortages and severe protests occuring in some regions, these questions deserve answers.
But if Venezuela needs private capital, technology and operators to help rebuild its electricity system, establishing the rules that allow them to participate would seem to be an important place to start.
For now, the reform remains unfinished—and the reason for the delay remains unclear.
NOTE: We welcome comments on the legislation and to help answer the question as to the delay. Send a brief note to [email protected]
Premium Subscribers access to additional related content information and intelligence:
1 Profile on Reinaldo Sifuentes and his efforts to move the legislation forward. »»»
2 Post: Venezuela's Electricity Crisis Requires a New Strategy say Energy Experts. »»»
3 Library: Read full text of legislation transcribed into English.
