On May 21st, 2021, the Secretary of Energy issued the Resolution No. 440/2021 (“Resolution 440”), which most relevant aspects are singled out below:

  1. Resolution No. 31/2020 (“Resolution 31”) is abrogated by Resolution 440, including the remuneration adjustment mechanism set forth in said Resolution 31.
  2. A new pricing scheme applicable to the Wholesale Electricity Market Generator Agents of Tierra del Fuego’s (WEMGATDF) is contemplated.
  3. WEM Agents included in Resolution 440 are required to waive any prior or future administrative claim against the National Government, the Secretary of Energy or CAMMESA, regarding the implementation of the remuneration adjustment mechanism provided in Resolution 31.
  4. Finally, CAMMESA is instructed to re-settle any economic transaction starting on February, 2021, thereof.

The purported aim of Resolution 440 is to mitigate the effects of the economic situation as a result of the economic crisis and COVID-19 pandemic, as a way to ensure the sustainability of the WEM under economically reasonable and efficient conditions.

Below is a summary of Resolution 440 most relevant aspects:

1. Scope of Resolution 440

A new remuneration mechanism for conventional and renewable generation, cogeneration and self-generation, operating without a PPA, has been approved, effective as of February 1st, 2021.

2. Changes in the remuneration conditions of the Generating Agents

Resolution 440 provides for a new remuneration scheme for the WEMGATDF and WEM Agents, with increases in around 29% when compared to repealed Resolution 31, with effects starting on February 2021.

Unlike abrogated Resolution 31, Resolution 440 does not include a remuneration adjustment mechanism.

3. Waiver under Resolution 440

WEM Agents included in Resolution 440 which choose to benefit from Resolution 440 are required to waive any prior or future administrative claim against the National Government, the Secretary of Energy or CAMMESA, regarding the implementation of the remuneration adjustment mechanism provided in Resolution 31.

Such waiver shall be submitted no later than June 21st, 2021.

For those WEM Agents which chose not to submit such waiver, they shall continue receiving the remuneration set forth in Resolution 31 and forfeit they right to receive the retroactive amounts provided in Resolution 440.

If such waiver is submitted later than June 21st, 2021, they shall receive the new remuneration set forth in Resolution 440 but will not be entitled to receive said retroactive amounts.

 

For further information, please contact either Nicolás Eliaschev or Javier Constanzó.