Energy regulator cannot stand on equal footing with ANDE, Zavala says as he challenges reform

Paraguay’s proposed energy regulator would repeat the central weakness of the country’s electricity system if it remains on the same hierarchical level as the state-owned ANDE, former Industry and Commerce Minister Diego Zavala said.

Speaking on behalf of the Business Council of Latin America, Zavala criticized the bill presented by the executive branch. The proposal would create an Energy Regulatory Entity under a Ministry of Energy rather than establish it as an autonomous body. In his view, that design would again place technical oversight under political control.

Zavala pointed to the National Telecommunications Commission, Conatel, as a model he considers successful because it operates independently and can sanction competing operators. “No one should have more political power than anyone else,” he said. He warned that placing the new entity at the same level as ANDE would limit its ability to sanction the state utility or settle disputes with private generators.

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No one should have more political power than anyone else.

He said the regulator should be appointed with congressional participation, have autonomy over its resources and rank above ANDE and all generators. He also criticized the project for leaving licensing powers with the executive branch, saying this would make it harder to authorize new generation where it is needed.

Another major concern is ANDE’s role as the sole buyer of electricity. Zavala called this a monopsony that prevents private generators from negotiating better terms because they have no alternative buyer. He cited the price ANDE offers companies interested in building solar plants, saying the state utility aligns it with the Itaipú tariff even though photovoltaic installation costs about $40 to $50 per megawatt-hour. He warned that the arrangement would become unsustainable when Itaipú’s energy “runs out” in five to seven years.

Zavala also objected to limiting the proposed market opening to generation while leaving transmission and distribution closed. The article ends while he is making that criticism.

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runs out