Chile passes electricity rate stabilization bill for vulnerable households

Chile’s Senate has passed an Electricity Rate Stabilization Bill that includes the creation of a subsidy to reduce the electricity bills of around 1 million vulnerable households and a mechanism that will benefit the reduction of rates to the communes that have coal-fired generation plants. The subsidy will cover the cost of a basic energy basket in a household, a discount that will be applied directly to customers' bills and that is expected to be financed by current tax charged to customers with high energy consumption and public resources. 

The initiative also includes the proposal of a Territorial Generation Recognition Mechanism (RGT), aimed at lowering the electricity bills of families residing in communes, where there are coal-fired power plants (such as Mejillones, Tocopilla, Huasco, Puchuncaví and Coronel), representing a reduction of about 30% of the electricity bills in these regions. 

The measures aim at mitigating the significant increases in electricity bills projected by the National Energy Commission (CNE) for the segment not protected by the current Transitional Customer Protection Mechanism (MPC), which without this initiative would have increased by up to 150%. This measure will mainly benefit SMEs, small businesses in neighbourhoods and families that share meters.

Finally, a working group will be created to evaluate other sources of financing to increase the annual subsidy for vulnerable families and analyse other policies to reduce the increase in the electricity rate for regulated customers. The bill has passed for the federal government approval to be signed into law.