The plan for Ecopetrol to enter electricity generation

Although the Government sought through an article in the National Development Plan to allow the complete vertical integration of the electrical system, it fell through in Congress. However, the document did establish the repeal of another, which would allow ISA, controlled by Ecopetrol since 2021, to generate energy.

“Our proposal is to make Ecopetrol become the largest solar energy generation company in Latin America, gradually abandoning oil extraction. We would get more value and more fight against climate change”trilled President Gustavo Petro.

Likewise, a bill is in progress in Congress, filed by Senator José David Name, which seeks to revive vertical integration as had been proposed in the PND.

These two paths are the ones being evaluated so that the state oil company enters the power generation business and can sell it to the system.

It should be remembered that transmission companies are currently not allowed to carry out this activity, to avoid conflicts of interest and maintain the efficiency of the system.

(See: Ecopetrol will finance 27 works for taxes).

However, with the aim of accelerating the energy transition and leveraging Ecopetrol’s installed capacity, the Government sought to withdraw this prohibition through the creation of an article, which finally fell into reconciliation of the final text of the National Development Plan. .

Manuel Gómez, a lawyer specializing in advising Cuatrecasas on energy matters, explained that “in the last article of the Plan they included a repeal of the third paragraph of article 167 of Law 142 and the third paragraph of article 32 of Law 143”.

The two laws refer to the provision of public services and electrical service and both paragraphs repeal a prohibition directly referring to ISA so that it did not generate, distribute or commercialize electricity.

“This company, before the creation of these laws was ISA and Isagén, that is, it generated and transmitted; but with these regulations they separated”indicated.

And he explained that the exception for the specific case of ISA was very important, because article 74 of Law 143 said that it could not be transmitted and do other activities of the chain, but those who were integrated before the law could continue doing so, as long as it was with renewable generation.

What this means is that the government could argue that the mixed broadcaster has an acquired right, since Law 143 allowed the integrated companies to continue carrying out their activity.

(See: What is the risk for Ecopetrol if the FEPC deficit is not paid?).

However, this has generated discussions among jurists. Gómez points out that the Law sought to take away this power from ISA specifically, by dedicating paragraphs for its separation from Isagén and the prohibition.

To this is added that the transmission company has XM, operator of the electricity market, the National Dispatch Center (CND), the Administrator of the Commercial Exchange System (Asic) and the Liquidator and Account Administrator (LAC). For this reason, they wanted to prevent ISA from developing other activities that would conflict with their additional roles.

DANIELA MORALES SOLER
Journalist Portfolio