Energy regulator could need up to $5 million a year to guarantee independence, engineers say

A future energy regulator in Paraguay would need up to $5 million a year to operate independently, according to Amílcar Troche, president of the Paraguayan Center of Engineers.

Speaking at a forum on energy, investment and employment organized by the Chamber of Electromechanical Construction Companies, Troche argued that the regulator should have technical, administrative and financial independence. He warned against a model that relies entirely on public funds.

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It would not be advisable for the operation of a regulatory body to depend exclusively on the national budget.

“It would not be advisable for the operation of a regulatory body to depend exclusively on the national budget,” Troche said. He proposed a specific law creating a transparent financing mechanism whose resources would be used solely to run the agency. “The regulator cannot depend financially on the party it must regulate,” he said.

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The regulator cannot depend financially on the party it must regulate.

Troche pointed to Uruguay, where the electricity regulator receives 0.2% of the sector’s gross revenue. He said regional systems range from 0.2% to 2% in more developed countries. Applied to ANDE’s revenue, that range would produce between $3.5 million and $5 million annually, which he said would be enough to operate the body.

Gianmarco Felippo, president of the construction chamber, said the main constraint on new investment is transmission and distribution infrastructure, not power generation. He argued that a regulator could help turn Paraguay’s low-cost electricity into “bankable” energy by offering long-term price certainty. The forum also raised concerns about delays in ANDE’s investment plan, although the provided account ends before detailing those concerns.

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The bottleneck now is not generation, it is transmission and distribution.