Venezuela approves bill to open electric sector to private investment

Venezuela's National Assembly has passed a bill to reform the Organic Law of the Electric System and Service, a move intended to open the sector to private investment amid ongoing power outages. The reform seeks to tackle the system's structural and financial limitations, which have struggled to meet national demand. Chavista deputy Orlando Miranda acknowledged that the national electric system has faced significant challenges, exacerbated by the inability to purchase necessary spare parts due to U.S. economic sanctions. This has increased reliance on the Guri Hydroelectric Power Station. The proposed reform, presented by Executive Vice President Delcy Rodríguez, introduces a mixed and private capital scheme under a rigorous regulatory framework. This includes public oversight and shared civil and penal responsibility for operators. A key aspect of the new law is empowering citizens by obligating distribution and commercialization companies to provide financial compensation to users affected by blackouts or quality issues. The economic viability of the reform hinges on a tariff design that reflects real costs and ensures reasonable profitability for investors, tied to efficiency criteria. Opposition deputy Ezio Angelini, however, urged the inclusion of decentralization and a thorough audit of past resources allocated to the sector, citing corruption as a cause of the persistent outages. Angelino noted a stark decline in electricity production, from 20,000 megawatts in 2019 to current levels where consumption exceeds production.

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In recent times, the national electric system has shown structural and financial limitations in responding to the demands of Venezuelans.