July 26th/2024.
On July 4th, the Energy and Gas Regulatory Commission (“CREG” as per its acronym in Spanish), issued Resolution No. 101 046 of 2024 (the “Resolution”), which complements the alternatives for the assignment of OEF for plants under construction.
CREG identified the importance of complementing the existing mechanism for the assignment of firm energy obligations (“OEF” as per its acronym in Spanish). This would allow for assignments over a period longer than one year without requiring CREG’s determination on the execution of reconfiguration auctions, which maintain the objective of the expansion auction for the reliability charge (“CxC” as per its acronym in Spanish) to incorporate new generation plants to the system to meet the increased energy demand.
The objective of the Resolution is to enhance the security framework of the CxC by providing a mechanism for a multi-annual transfer of OEF for plants under construction, regardless of a reconfiguration auction called upon by CREG.
Consequently, the power generation agent that represents a plant under construction, and has been awarded with OEFs through any allocation mechanism may transfer its OEF for periods ranging from December 1 of year t to November 30 of year t+2, provided that:
a) Theplant under construction must comply with the progress stipulated in Resolution CREG 114 of 2014, and
b) The OEF transfer can be executed for a period of 1 year, from December 1 of year t to November 30 of year t+1, or for a period of two (2) years, from December 1 of year t to November 30 of year t+2.
The power generation agents that meet the requirements to assign the corresponding OEF period, must execute and register the OEF assignment agreement with XM S.A. E.S.P., for a period of up to two (2) years, in accordance with the requirements set forth in Article 3 of the Resolution.
The assignment of the OEF period must be entered into with an agent different from the assignor of the OEF, considering the alternatives for the assignees who can receive multi-annual OEF assignments, which must be: plants under construction at risk, and existing plants with Additional Available Energy (“EDA” as per its acronym in Spanish) and Additional Available Energy from Thermal Plants.
Plants under construction at risk that allocate the assignment of OEF with Firm Energy for the Capacity Charge of the plant must comply with the procedures outlined in Resolution CREG 071 of 2006 and 101 024 of 2022.
Additionally, for OEFs supported by assignments to an EDA, the agent must establish a guarantee that complies with the incremental guarantee provisions outlined in Resolution CREG 061 of 2007.
The power generation agent assigning its OEFs pursuant to the terms of the Resolution will have the effective date of its OEFs deferred by 1 or 2 years, contingent upon the selected OEF transfer duration. The termination date of the OEF period will remain unchanged from the date initially established at the time of OEF allocation.
The Resolution shall take effect from the date of publication, that is July 18th, 2024. XM will have a period of 30 business days from that date to implement the Resolution.