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4.1 El Salvador and Its Electricity Sector Comprehensive information on the latest changes in the electricity sector in El Salvador is in a publication from the National Energy Council (Consejo Nacional de Energía, or CNE)7. That information is summarized in the following paragraphs. In the mid-1990s, El Salvador initiated a process to reform the electric sector. The first step of the reform was to create the regulatory framework and institutions to approve the General Electricity Law and the Law for the Creation of the General Superintendence of Electricity and Telecommunications (SIGET, for its acronym in Spanish). The General Electricity Law (Decree No. 843) and its legislation were promulgated in 1996 and 1997 by the Direction of Electric Energy (Dirección de Energía Eléctrica, or DEE)—an entity that belongs to the Ministry of Economy (MINEC). The next step in the reform of the electricity sector was to sell the government thermal plants and distribution companies, through CEL. Together with the new legal framework, a tariff structure was established, noting that the electricity price should be set based on market principles. The price earned by the distribution companies took into account the offers of electricity prices in the wholesale market, the costs of service to the clients, and the charges for the use of the grid. The owners of the grid were responsible for grid maintenance, for operating efficiently, and for ensuring quality of service to final users in their geographical areas of operation. In 1998, the Transmission Company of El Salvador (Empresa Transmisora de El Salvador, or ETESAL) and the Unit of Transactions (UT) were created. UT is responsible for operating and managing the electricity system. Between 1999 and 2010, there were additional reforms in order to improve the electricity market and achieve better transparency as well as to open the market to long-term contracts. Between 2003 and 2008, the General Law and its regulation were amended. In addition, two laws were approved: the law that establishes the CNE as the rector entity of the sector, and the Law of Fiscal Incentives for Non-Conventional Renewable Energy. The Rules of the Operation of the Wholesale Market Based on Production Costs (Reglamento de Operación del Mercado Mayorista Basado en Costos de Producción, or ROBCP) were approved in 2009 and implemented in 2011, establishing a new scheme for the wholesale market. 7. Consejo Nacional de Energía, “Mercado Eléctrico,” http://www.cne.gob.sv/index.php?option=com_content&view=article&id=277&Itemid=119. 28PDF Image | Unlocking Geothermal Power Eastern Caribbean Powerhouse
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