On December 21, 2023, President Javier Milei released Emergency Decree No. 70/2023 (“Decree 70”). Decree 70 will enter into force on December 29.

While emergency decreets are constitutionally required to go through Congress, they are binding until they’re overturned.

Key aspects of the measures adopted by Decree 70 with respect to the energy sector are summarized below:

1. Hydrocarbons: Decree 70 revokes Decree No. 1060/2000 that established a limited term of exclusive fuel supply contracts entered into between oil companies and/or fuel suppliers and gas stations operators.

2. Electricity:

  1. Export Contracts: Decree 70 revokes Decree No. 1491/2002. This decree established that power capacity, energy and trading agreements: (i) were not comprised by Law No. 25,561 (that declared public emergency and the reform of the FX rate regime in 2002) and Decree No. 214/2002 (which allowed debtors to cancel payment obligations in Argentine pesos), and (ii) would be exclusively invoiced in US Dollars.
  2. Power Transmission Expansions: Decree 70 revokes Law No 25,822 that established the “Federal Electric Transportation Plan”, implemented by the Secretary of Energy (the “SE”). It also revokes Decree 624/2003 that authorized the SE to re-determine the fee or price corresponding to the portion of power transmission facilities not yet operational, regarding high voltage transmission or trunk distribution grid.
     
  3. Refundable loans: Decree 70 revokes Decree No. 311/2006, that approved refundable loans from the National Treasury to the Unified Fund, created by Section 37 of Law No. 24,065. Per law, receivables of the Unified Fund would act as a hedge against the fluctuations of the spot price and the stabilized price of the Wholesale Electricity Market (WEM).
     
  4. Distributed Generation: Decree 70 abrogates Sections 16 to 37 of Law No. 27,424, which foresaw certain promotional provisions with respect to distributed generation.

3. Powers granted to the Secretary of Energy: Decree 70 gives broad rights to the SE to redetermine the current pricing and subsidy structure of the energy chain, comprising electricity and gas.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Pablo Arrascaeta, Daiana Perrone, Rocío Valdez, and/or Victoria Barrueco.