Chile: Electric giant requests authorities to allow vertical integration

Chilean energy behemoth Enel, which through its subsidiary companies Enersis, Endesa and Chilectra controls an important share at all steps of Chile’s energy production and distribution market, has intensified its lobbying efforts aimed at revoking Resolution 667 of the country’s competition code. This resolution forbids countries from attempting vertical integration of their businesses for electric generation and distribution.

Enel executives have said that Res. 667 made sense when the Enersis group still had a dominant position and had its own generation, distribution and transmission infrastructure (the former Transelec). The situation today has changed, however. Any modification will have to be presented and ratified by the country’s highest competition regulator, the TDLC.

However, some have alerted that Endesa continues to be dominant in the generation sector. This, should the rule be changed, would mean that eliminating the rule may unchain market risks, and even promote decisions which may hurt minority shareholders and/or customers. These analysts warn that, should there be an eventual integration, it would be necessary to keep watch in order to prevent discrimination – that is, to make sure the energy is being sold to other companies at the same price.

Full Content: Economía y Negocios

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