On March 12, 2014, we reported that the executive branch had tabled an important bill in the Senate (“Invoice”) aimed primarily at (a) authorizing the Dominican State, through the Corporación Dominicana de Empresas Eléctricas Estatales (“CDEEE”), to participate, on a temporary basis, in the development of electricity production projects aimed at modifying the national energy matrix and increasing the supply of electricity production from low-cost and low-environmental-impact sources, i.e. as a developer, either as an owner, directly or in partnership with the private sector (“State-owned power generation projects”), and (b) exempt the development and implementation of state-owned power generation projects from the procedures and conditions established by Law No. 340-06 relating to the procurement and contracting of goods , government services, works and concessions, essentially the bidding processes and associated timelines that, in the absence of such an exemption, the CDEEE must perform/adhere to in order to develop and implement implement state-owned power generation projects.
Recently, the National Congress passed legislation following the bill, which remains subject to the President’s promulgation (“Law”). Among other things, the law (a) authorizes the state, through the CDEEE, to develop state-owned power generation projects, (b) requires that state-owned power generation projects State are developed and implemented, at every stage, in strict compliance with constitutional requirements and applicable laws, in particular the General Electricity Law and related regulations, and (c) exempts distribution companies, both owned by the Dominican State, to comply with the bidding process mandates required by the General Electricity Law in order for these companies to enter into long-term contracts for the purchase and sale of electricity, insofar as the electricity covered by these contracts is produced by electricity production projects belonging to the State and 100% owned by the Dominican State, through of the CDEEE, or any other member of the Business Bloc its public power generation.
Similarly, the Act, among others:
- Provides that the authorization granted to the Dominican State to develop state-owned electricity generation projects, through the CDEEE, includes the granting of a definitive concession to build and operate electricity generation projects. electricity on the wholesale electricity market (MEM) of the national interconnected electricity system (“SENI”), if these projects are wholly owned (100%) by the Dominican State.
- Provides that the CDEEE must notify the National Energy Commission (“NEC”) and the Superintendence of Electricity (“EIS”) at least sixty (60) days prior to the commencement of construction of any Crown-owned power generation project.
- Provides that the CDEEE must provide to the CNE and the SIE, within the sixty (60) day period referred to above, among others, the following information/documents concerning any electricity production project belonging to the State:
- Location Information;
- Description of the civil works of the project;
- Technology to be used, in particular the type of fuel;
- Lifespan and production capacity;
- Description of electrical transmission structures and responsible for their construction;
- Electrical study containing, at a minimum, the analysis of short-circuit, load flow and stability of the Interconnected Network, for approval by the SIE;
- Project work schedule and expected date of commissioning;
- Environmental impact assessment; and
- Certificate of No Objection from the Ministry of Environment and Natural Resources.
- Introduces the concept of “Representative of public electricity production companies” for the purpose of participation in the Coordination Council of the Coordination Body of the National Interconnected Electricity System (“SENI”).
- Provides that where a state-owned power generation project is connected to SENI, the block of state-owned power generation enterprises of the coordinating body will be composed of (i) CDEEE, ( ii) the Empresa de Generación Hidroeléctrica Dominicana (EGEHID) and (iii) any other company wholly owned by the Dominican State and carrying out electricity production activities of any kind.
- Provides that it repeals any law, decree, resolution or provision that is contrary to it.
- Provides that it will enter into force after its promulgation and publication, in accordance with the Constitution, and after the expiration of the periods specified in the Dominican Civil Code.
To read the actual text of the law, including an English courtesy translation, please click here.