DOMINICAN REPUBLIC – Law that Authorizes the Dominican State, through the Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE), to Participate in Power Generation

SUMMARY

On March 12, 2014, we advised that the Executive Power had introduced an important bill to the Senate (“Bill”) seeking primarily to (a) authorize the Dominican State, through the Corporación Dominicana de Empresas Eléctricas Estatales (“CDEEE”), to participate, on a temporary basis, in the development of power generation projects aimed at changing the national energy matrix and increasing the... (see full summary)

 
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On March 12, 2014, we advised that the Executive Power had introduced an important bill to the Senate (“Bill”) seeking primarily to (a) authorize the Dominican State, through the Corporación Dominicana de Empresas Eléctricas Estatales (“CDEEE”), to participate, on a temporary basis, in the development of power generation projects aimed at changing the national energy matrix and increasing the supply of power generation from low-cost and low-environmental impact sources, either as a developer or owner, directly or in partnership with the private sector (“State-owned Power Generation Projects”), and (b) exempt the development and implementation of State-owned Power Generation Projects from the procedures and terms established by Law No. 340-06 regarding Purchases and Procurement of Goods, Services, Works and Concessions of the State, essentially from the tender processes and associated timelines that, in the absence of such exemption, the CDEEE should carry out/comply with in order to develop and implement State-owned Power Generation Projects.

Recently, the National Congress passed a law as a result of the Bill, which remains subject to the President’s promulgation (“Law”). Among other things, the Law (a) authorizes the State, through the CDEEE, to develop State-owned Power Generation Projects, (b) requires that the State-owned Power Generation Projects be developed and implemented, at each stage, in strict compliance with the constitutional requirements and applicable laws, in particular the General Electricity Law and related regulations, and (c) exempts the distribution companies, while they are owned by the Dominican State, from complying with the tender process mandates required by the General Electricity Law in order for such companies to be able to enter into long-term contracts for the purchase and sale of electricity, to the extent the electricity that is the subject of such contracts is generated by State-owned Power Generation Projects that are wholly owned (100%) by the Dominican State, through the CDEEE, or any other member of the Bloc of State-owned Power Generation Companies.

Likewise, the Law, among other things:

  1. Provides that the authorization granted to the Dominican State to develop State-owned Power Generation Projects, through the CDEEE, includes the granting of definitive concession to build and operate power generation projects in the Wholesale Electricity Market (MEM) of the National Interconnected Electric System (“SEN...

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