Operation of emergency generating sets

On September 8, 2024, the Electricity Regulation and Control Agency (“ARCONEL”) issued Regulation No. ARCONEL-003/24 titled “Technical-Commercial Operation of Emergency Generating Sets under Conditions of Generation Deficit and Electricity Rationing in the National Interconnected System (S.N.I)” (hereinafter referred to as the “Regulation”).

The Regulation sets out the technical and commercial conditions that regulated and non-regulated consumers who own generating sets must meet if they wish to participate in the supply of electricity during periods of generation deficit or rationing declared by the National Electricity Operator (“CENACE”).

The key aspects of the Regulation are detailed below:

• Requirements

The emergency generating set (“GEE”) must have a minimum nominal power of 100 kW. The maximum capacity will be determined by the respective electricity distribution and commercialization company (“Distributor”). Additionally, it must be equipped with an hour meter to record operating hours.

The Regulation prohibits the use of subsidized diesel for the operation of the GEE. Therefore, the owner of the GEE must purchase fuel as provided in Resolution No. ARCERNNR-020/2020 or any resolution that replaces it.

• Qualification Process

To implement this scheme, the owner of the GEE must qualify as an emergency generator (“Emergency Generator”) by following this procedure:

1. Submit the qualification application to the Distributor in their service area.
2. The Distributor will conduct a physical inspection of the applicant’s facilities.
3. If the inspection is favorable, the Distributor will issue a report and grant the Emergency Generator Qualification Certificate (“Qualification Certificate”).

Upon completion of this process, the Emergency Generator may operate the GEE during periods of generation deficit or rationing declared by CENACE.

• Benefits for Emergency Generators

Emergency Generators will receive financial compensation for the energy generated by the GEE, which will be determined monthly by ARCONEL.

If the Emergency Generator is a regulated consumer, the compensation will be applied to the amount on the invoice issued by the Distributor for the public electricity service. If the GEE produces more energy than consumed from the distribution grid, credit notes will be issued in favor of the Emergency Generator.

If the Emergency Generator is a non-regulated consumer (for self-consumption or large consumers), the energy generated by the GEE will be allocated to the Distributors and credited in favor of the respective self-generator or generator. Subsequently, the self-generator or generator must invoice this energy to the Emergency Generator at the same price as agreed in the private power purchase agreement (“PPA”) between the parties.

Lastly, it is established that electricity distribution companies must conduct quarterly informational campaigns through various media channels for private individuals or entities that own generating sets, encouraging them to qualify as Emergency Generators. Additionally, they must keep the information updated in the Strategic Information Management System (“SISDAT”), for which they are required to maintain a registry of the institutions and GEE.