For the enactment of Resolution 058, the CREG considered the norms provided by Article 3 of Legislative Decree 517 of 2020 and CREG Resolution 012 of 2020. The following is a brief description of these regulations’ content:

(i) Article 3 of Legislative Decree 517 of 2020 provides for the possibility of CREG to adopt special temporary schemes to defer payment of invoices issued. In addition, it authorizes CREG to adopt all measures it deems necessary to mitigate the effects of the State of Economic, Social and Ecological Emergency on users and agents in the chain. (ii) On the other hand, CREG Resolution 012 of 2020 raises the possibility for commercialization agents, based on possible abrupt changes in end-user tariffs as a result of the new methodology set out in CREG Resolution 015 of 2020, to adopt a tariff option that will make it possible to reduce the impact on users of such possible increases.

In this context, Resolution CREG 058 establishes transitional rules related to the payment of the value of the invoice for the electric energy utility and the application of the tariff option established by Resolution CREG 012 of 2020, in application of the provisions of Article 3 of Legislative Decree 517 of 2020. The regulation mainly establishes the following transitional measures:

First, it establishes that the following values will be subject to deferred payment:

(i) For strata 1 and 2, the value associated with the consumption of the invoiced period that exceeds the basic or subsistence consumption. (ii) For stratum 3, the value associated with consumption minus the subsidy applicable to the user. (iii) For stratum 4, the value of total consumption.

It should be mentioned that the application of this deferred payment applies for the billing periods April and May, and that it is mandatory for commercialization agents in respect with strata 1 to 4, although these users may choose between accepting the deferred payment or continuing to pay the invoice in accordance with the uniform terms contracts. For regulated users, before discontinuing service for non-payment, the commercialization agent must offer options for deferred payment of the invoice value. If the deferred payment is not honoured by the user, the commercialization agent may suspend the service.

Second, with respect to the publicity of these measures, both on the invoice and on the commercialization agent's website, the user should be informed of the following: (i) terms of acceptance of the deferred payment option, (ii) applicable funding rate, (iii) payment start date, (iv) payment period and (v) deferred value prepayment options.

Third, for the implementation of these measures, commercialization agents should offer users the following payment periods:

(i) For residential users in strata 1 and 2 the payment period shall be 36 months. (ii) For residential users in strata 3 and 4 the payment period shall be 24 months. (iii) For other regulated users the period shall be agreed with the marketer.

Fourth, for transmission, distribution and commercialization activities, these agents are authorized to charge less than the approved maximum value, if this covers the operating costs of the utility.

In this case, the providers of transmission and distribution activities may inform the LAC of the value of the revenue or charge to be applied. Such value must be informed and referenced to the base month according to the revenue methodology, and at least 2 days prior to the publication date of estimated or preliminary charges, and final charges or invoice, as applicable.

In addition, commercialization agents must include the reduction of the commercialization charge in the unitary cost for the provision of the service.

Finally, the tariff option applies from the issuance of this resolution and up to two months after May 30, 2020 (date on which the state of health emergency declared by Resolution 385 of the Ministry of Health and Social Protection ends). Marketers must apply the tariff option defined in CREG Resolution 012 of 2020 when there is an increase of more than 3% in the Unitary Cost of Service Provision or any of its components. In this regard, the main novelty is that, prior to CREG Resolution 058 of 2020, the application of the tariff option was an alternative offered to those Retailers who chose to use it, preferring its application to the general tariff formula provided for in CREG Resolution 119 of 2007, provided that they met the requirements set forth in Article 2 of CREG 012 of 2020.

SEE CREG RESOLUTION 058 OF2020