The Energy Regulation and Markets Review - Stikeman Elliott

Colombia
regulations include CREG Resolution 024 of 1995 issued by the Energy and Gas
Regulation Commission (‘CREG’), which regulates the MEM, while resolution CREG
025 of 1995 regulates the national transmission system expansion plan and resolution
CREG Resolution 071 of 2006, as amended and clarified, regulates the reliability charge
that power generators receive for the availability of their energy generation assets and
back-up energy generation capacity in order to guarantee an energy supply to end
users under emergency conditions. On the other hand, CREG Resolution 128 of 1996
provides certain rules for vertical and horizontal integration of business within the
energy market. Finally, it is worth mentioning that Law 99 of 1993 provides the general
environmental legal framework.
II
REGULATION
i The regulators
Although, strictly speaking, the CREG is the sole entity that is defined as a regulator in the
energy sector, there are other entities with roles in the industry. The constitutional duties
and responsibilities of the Colombian government with respect to the electricity sector
are generally carried out through several governmental entities, including the following.
The Ministry of Mines and Energy (‘the MME’) is responsible for the overall
policymaking and supervision of the electricity sector. It regulates generation,
transmission, trading, interconnection and distribution, and approves generation and
transmission programmes. Direct supervisory authority over the electricity sector is
entrusted to a number of agencies under its control, including the CREG and UPME,
which is a special administrative unit of the MME responsible for developing and
updating the national energy plan and the national reference expansion plans. UPME is
also responsible for forecasting the overall electricity requirements of Colombia, planning
and developing ways and means to satisfy such electricity requirements (including the
development of alternative sources of energy) and establishing programmes to preserve
and optimise the use of energy. All electricity transmission companies are required to
prepare and submit information to UPME upon UPME’s request.
The Superintendency of Domiciliary Public Utilities (‘the SSPD’) is a governmental
agency created pursuant to the Constitution, which possesses supervisory authority over
all public services companies. The SSPD monitors the quality and efficiency of all public
services companies, but does not issue regulations regarding their businesses. The SSPD
can also take over public services companies when the rendering of the service or viability
of such companies is at risk. The SSPD may impose sanctions on electricity companies
for non‐payment and violations of the code of operations applicable to the electricity
industry, which establishes the principles, criteria and procedures for the planning,
coordination and operation of the National Interconnection System (‘the NIS’) and for
non‐compliance with any of the resolutions of the CREG or the UPME. Penalties may
include monetary fines, removal of officers or administrative takeover.
The National Operation Council (‘CNO’) is a consultative entity composed of:
a one representative of each generation company accounting for more than 5 per
cent of the installed capacity of the NIS;
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