Chile | Update on Supreme Decree 88
Supreme Decree 88, which enacts a new regulation for Small Scale Generation Units (PMG/PMGD), was submitted again to Contraloría (Comptroller General of Chile), on June 24th, 2020. Among other changes, a new methodology is defined for Stabilized Price computation, that PMG(D) can choose for their injection valuation: in particular the Stabilized Price is now differentiated between 6 timeslots, with the use of an additive adjustment factor instead of multiplicative.
The new regulation (still pending approval and publication) sets a transitory period, during which PMG(D) will be able to maintain price from the current methodology. Unlike the regulation that had been submitted in October 2019, which defined a 14 years transitory period starting from submission date, this new version defines a 13 years and 9 months transitory period starting from publication date. Besides, the required milestones to choose the price computation methodology are also defined from the publication date instead of submission (7 months to obtain the ICC and 18 months to be declared in construction).
These changes have a strong impact on future assets incomes and IPP development strategy.
