enes



In September 2006, the SE (former Secretariat of Energy) approved Resolution No. 1281/06, which establishes certain restrictions on the sale of electricity and implements the Energía Plus service aiming to encourage the development of new power generation supply. These measures imply that:

i. Qualify the power generators, co-generators and self-generators which, as of the date of the publication of SE Resolution No. 1281/06, are neither WEM (Wholesale Electricity Market) agents nor have facilities or interconnection with the WEM;

ii. Applicable power plants should procure fuel and transportation;

iii. The energy used by LU300 (Large users with demands in excess of 300 kW) in excess of the Base Demand (the electrical consumption for the year 2005) qualifies to contract Energía Plus within the MAT (Term Market) at a price negotiated between the parties; and

iv. For new LU300 entering the grid, their Base Demand equals zero.

Within this framework, CTG (Güemes Thermal Power Plant), EcoEnergía (EcoEnergía Co-Generation Power Plant) and CTGEBA (Genelba Thermal Power Plant) provide the Energía Plus service to different WEM clients, which represents 292 MW gross capacity. It is worth highlighting that, effective as from May 2019, CTG transferred its contracts to CTGEBA, selling its electricity in the spot market.

If a power plant cannot meet its Energía Plus demand, it should purchase that power in the spot market at the operated marginal cost. On the other hand, SE Note No. 567/07, as amended, provided that LU300 not purchasing their Surplus Demand within the MAT should pay the CMIEE (Surplus Demand Incremental Average Charge or Cargo Medio Incremental de la Demanda Excedente), and the difference between the real cost and the CMIEE would be accumulated in an individual account on a monthly basis for each LU300 within CAMMESA’s (Compañía Administradora del Mercado Mayorista Eléctrico or the Argentine Wholesale Electricity Market Clearing Company) scope. As from June 2018, pursuant to SE Note No. 28663845/18, the CMIEE became the greater of AR$1,200/MWh or the temporary dispatch surcharge. Additionally, it was provided that, until further instruction, movements in the individual account of each LU300 would temporarily not be recorded.

Energía Plus contract values are mostly denominated in US$; therefore, when expressed in AR$, they are exposed to FX (foreign exchange). Due to the decrease in surplus demand resulting from the economic recession, some LU300 decide not to enter into Energía Plus contracts, and generators must sell their energy at the spot market with lower profitability margins. Additionally, because of the surplus energy from LU300, Energía Plus contracts were affected by the growth in MAT ER (Term Market from Renewable Energy Sources) renewable energy contracts.