ENERGY REFORM IN THE
DOMINICAN REPUBLIC:
INVESTMENT AND RESTRUCTURING
EXPERIENCE IN THE DOMINICAN REPUBLIC ELECTRIC SECTOR
Amauris Vásquez Disla
London, November 24th, 2014
KEY HISTORIC FACTS
DATE
Before 1954
Private companies where responsible for generating, distributing and
commercializing electricity
1954
Rafael Trujillo (Dominican dictator) nationalized the electricity Company
(Compañía Eléctrica de Santo Domingo) into a public Company called
Corporación Dominicana de Electricidad (CDE)
1955-1990
The Dominican electricity system was expanded through different plans
which did not give the expected results
1990
Energy crisis worldwide – great impact in the Dominican energy sector
1990-1999
- Private companies were introduced to the electricity sector
- Energy Reform – Capitalization process
1999-2013
In this period most of the capitalization achievements were changed
due to what have been called as electricity sector counter reform
ENERGY LEGAL FRAMEWORK
Electricity Reform (Capitalization)
Private Contracts (IPP’s)
The National
Council for
Energy is
created under
Decree148-93
1990
Law 14-90
Incentive for
National
Electricity
Development
1992
1993
1993
Enactment of
Electricity
Law125-01.
1997
Enactment of
Public
Enterprises
Reform Act
(Law 141-97).
CDEEE is
created.
2001
2007
Renewable
Energy
Incentive Law
RELEVANT ENERGY LEGAL FRAMEWORK
Law 125-01
Conventional
Energy Production
& Distribution
Law 57-07
Renewable
Energy Special
Regime
Law 112-00
Hydrocarbons
Law
SPECIAL MANDATORY LICENSES & PERMITS
REGULATORY L & P FOR THE GENERATION OF
ELECTRICITY
Executive Power:
1. Definitive Concession: a) Enforcement Regulation of Electricity Law, Art. 70; Enforcement Regulation of the Incentives to Development of
Renewable Energy Sources Law, Arts. 37 & 53.
2. Import Terminal License: a) Hydrocarbons Law No. 112.
National Energy Commission:
1. Temporary Concession: a) Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law, Art. 24
2. Recommendation of Definitive Concession's Requests: Enforcement Regulation of the Incentives to Development of Renewable Energy Sources
Law, Arts. 38; 46; 52
Superintendence of Energy:
1. Set up of electric works and services: a) Electricity Law, Art. 90; b) Enforcement Regulation of Electricity Law, Art. 146
2. Recommendation report of definitive concessions: a) Art. 21 b) Enforcement Regulation of Electricity Law c) Enforcement Regulation of the
Incentives to Development of Renewable Energy Sources Law, Art. 38; 43
CDEEE:
1. Certification of No Objection to PPA: a) Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law,
Art. 65
ETED:
1. Certification of No Objection to SENI Interconnection: Enforcement Regulation of the Incentives to Development of Renewable Energy
Sources Law,
LOS COCOS WIND PROJECT
GOVERNMENT LICENSES AND PERMITS
Agreement the use of
Landfor
Land
Regulatory P & L for
Electricity Generation
Electricity
Electricity Law
Law -- Arts.
Arts. 72
72 –– 75
75
(Peace
(Peace Magistrate)
Magistrate) Regulations
Regulations on
on the
the Electricity
Electricity
Law
Law Art.
Art. 125
125
1.
1.
(Peace
(Peace Magistrate)
Magistrate) Regulations
Regulations for
for the
the Law
Law on
on
Incentives
Incentives for
for the
the Development
Development of
of Renewable
Renewable
Energy
Energy Sources
Sources and
and their
their Special
Special Regimes
Regimes -- Art.
Art. 75
75
National Electricity
Commission
Superintendence of
Electricity
CDEEE
ETED
1. City Hall / Chapter Hall
2. Environmental
License
Enviromental
(MIMARENA)
3. Construction License (MOPC)
4. No
Objection
Certificate
(MITUR)
5. Ministry
of
Industry
and
Commerce
6. Dominican Institute of Civil
Aviation
7. Firefighters
8. Civil Defence
Defense
9. Port Authority
10. Navy
National Energy Commission
Special P & L particular for each
project given their geographic
location
General P & L for any kind of
Infrastructure Project
Infraestructure
Project
Executive Power
Superintendence of Electricity
1.
1.
2.
2.
1.
1.
2.
2.
3.
3.
Project
Project for
for the
the Development
Development of
of Valle
Valle
Juancho
Juancho (PRODEVAJ)
(PRODEVAJ)
Foundation
Foundation for
for the
the Development
Development of
of
Samaná
Samaná
Archaeological
Archaeological Institute
Institute of
of Dominican
Dominican
Man
Man Museum
Museum // Cultural
Cultural Heritage
Heritage
GENERAL LICENSES AND PERMITS
FOR ANY INFRASTRUCTURE PROJECT
City Hall/ Chapter Hall
Law No. 675 on Construction and Public
Ornaments and subsequent modifications by
Law No. 6232
Dominican Civil Aviation Institute
Law No. 491-06 on Civil Aviation
Environmental License/ MITUR
Law No. 64-00 on Environment and Natural
Resources
Firefighters Body
Organic Firefighters Law No. 5110
Construction License/ MOPC
Law No. 675 on Construction and Public
Ornaments
Law No. 687 on the Creation of an Engineering,
Architecture and Related Systems
Civil Defence
Law No. 257 that creates the Civil Defence
Office
No Objection Certification/ MITUR
Organic Law on Tourism No. 541
Commerce and Industry Ministry
Law No. 112 on Hydrocarbons
Port Authority
Law No. 70 that creates the Port Authority
Navy
Organic Law of the Armed Forces of the
Dominican Republic No. 873
POSSIBLE ENERGY REFORM
Reform to Law 57-07 of Renewable Energy in order to reintroduce the tax incentive
(income tax) to renewable energy, eliminated by fiscal reform of 2012
Special permits (ventanilla única or one-window service) to incorporate all
regulatory and filling registry
Extrapolate the experience of efficient Isolated System (CEPM), which has a 99.1%
rate of collection
Currently, energy debts are personal responsibility of the client (“intuito personae”);
its necessary to assign such debts also to the real state
Enforce the technical tariff established by Law 125-01 in order to reduce the deficit
of the sector
Proceed with the international bid of the 3 distribution companies, currently under
the control of the Dominican State
ADVICE TO POTENTIAL INVESTORS
Discuss with all regulatory agencies the needs and their vision of the sector in order
to avoid conflicting projects with the national agenda
Currently the CDEEE does not applies the energy rates established by Law 57-07 for
renewable energy producers; its advisable to discuss this issue for developing any
business model
If possible, find and select a strong local partner with experience in the energy
sector
Currently the CDEEE pays outstanding energy invoice to producers with 4 to 6
months delay; its necessary to take this issue into consideration for developing any
business model
Thank you!!
Amauris Vasquez Disla
De Camps Vásquez & Valera
avasquez@dcvlex.com