For the last 30 years, Chilean energy policy has been very successful in guarantee, at reasonable prices, a stable energy supply for the industrial and domestic sector, which nowadays covers almost the 99% of the population. On the other hand, the current energy regulatory framework is based on the incentive of private investment for the construction of new network infrastructure, which, consequently, puts the development of the energy market, not in hands of a public decision and, therefore, more exposed to the instability of the economic cycle when facing increments in the demand of energy.
II. State BPeru
(written by Bonilla Acosta, Juan)
On the decade of 1990, the Peruvian state had changed his active role in the economy by becoming a promoter and supervisor of it. ..)By 1997, the privatization process of the electricity and mining sector was in its first years. In order to regulate the activities of this new private undertakings that were going to be a natural monopoly, the presence of specific sector regulators were necessary. Specific regulators for water supply, energy, telecommunications and transport were created.
Nuevas rutas para una mejor Regulacion; Urrunaga, Roberto; Bonifaz, Jose Luis; Universidad del Pacifico, 2012, page 22.
The energy sector is regulated by one specific National Regulatory Office in Peru. It is Osinergmin (Supervisor Organism of the Investment in Energy and Mining), the public office who is in charge of monitoring all activities related to gas, electricity and mining.
Thecreation of Osinergmin was on December 31, 1996, but the office only started his functions until October 15, 1997.
The main goal of Osinergmin is to regulate and supervise all the activities of the undertakings from the energy and mining sector.
The functions of Osinergmin are to supervise, regulate, monitor, sanction, rule, solute complaints and controversies.
The functions of Osinergmin are stated on the law 27332 (Law of the Regulatory Organism of the Private Investment in Public Services).
The framework of the energy regulatory office is different according to its sectors. The development of the infrastructure in electricity, gas and mining has different scenarios. In the case of mining, Peru is very depending on exporting mining resources and it makes Osinergmin to put a lot of its efforts on supervising environmental issues in this activity. On electricity sector, Peru is a country that nowadays is working more in production of electricity and gives important support to those firms who want to invest in production infrastructure. In this case Osinergmin supervise the activities of these undertaking, making them comply all the tasks they promised to perform when they received an electricity concession. Finally, in the gas sector, the development has just started. Since 15 years ago, Peru has discovered gas deposits in its territory. On the first 10 years the main activity has been the gas extraction and Osinergmin was supervising all the environmental rules. Nowadays, the principal task is supervising the behavior of the undertakings who are supplying the citizens with gas. The pipes are still in building process and only 15% of the population has gas connections in their houses.
The advantages and disadvantages of having specific regulatory office in energy have changed during the years. On the first decade, these private firms acted with a lot of freedom and there was some inconformity from the population. With the pass of the years, the regulatory office has corrected his behavior and has developed investment in infrastructure good tariffs fix in all the energy sectors. Its presence has been very helpful for a sustainable and continuous growth.
Some advantages of the presence of Osinergmin are:
- Regulation of tariffs.
- More electricity access for population.
- More gas access for population.
- Growth in electricity transmission infrastructure.
Development of gas transmission infrastructure.
Nuevas rutas para una mejor Regulacion; Urrunaga, Roberto; Bonifaz, Jose Luis; Universidad del Pacifico, 2012, page 55.
On the opposite side, some disadvantages are:
- Political inherence in decisions.
- Bureaucracy on decisions.
- Superposition of functions between Osinergmin and Ministry of Energy.
Controversy between National Competition office and Osinergmin.
Nuevas rutas para una mejor Regulacion; Urrunaga, Roberto; Bonifaz, Jose Luis; Universidad del Pacifico, 2012, page 57.