Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile

The Chilean socio-political explosion in October 2019 embodies a milestone in Chile’s national history, challenging the current government’s administration and the management of state resources. One of the triggering factors of this crisis was the increase in electricity prices for those clients pre...

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Autores principales:	Humberto Verdejo Fredes, Benjamin Acosta, Mauricio Olivares, Fernando García-Muñoz, Francisco Tobar, Vannia Toro, Cesar Smith, Cristhian Becker
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	energy price socio-political crisis regulated clients Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
Acceso en línea:	https://doaj.org/article/70f8afb2e6864bb09343bef3ec8603a3
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spelling	oai:doaj.org-article:70f8afb2e6864bb09343bef3ec8603a32021-11-11T19:34:09ZImpact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile10.3390/su1321118702071-1050https://doaj.org/article/70f8afb2e6864bb09343bef3ec8603a32021-10-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/21/11870https://doaj.org/toc/2071-1050The Chilean socio-political explosion in October 2019 embodies a milestone in Chile’s national history, challenging the current government’s administration and the management of state resources. One of the triggering factors of this crisis was the increase in electricity prices for those clients previously subject to flat pricing. As an example, in 2019, electricity fees increased by 25% at the national level. In order to solve the conflict, the Ministry of Energy proposed a mechanism, applicable for two years, which would freeze energy charges for companies, industries and domestic customers subject to a regulated tariff. This mechanism was employed and would produce a debt favoring generation companies, which could not exceed CLD 1.350 million. This article analyzes the effectiveness of the energy price stabilization mechanism and the effects of the Chilean socio-economic instability—resulting from the aggregated debt generated by the mechanism applicability—on the exchange rate over its duration of operation. The results suggest that the effects of the current law will not fulfill the purpose of tariff stabilization until 2024; additionally, there will be a sustained increase in tariffs until the year 2027.Humberto Verdejo FredesBenjamin AcostaMauricio OlivaresFernando García-MuñozFrancisco TobarVannia ToroCesar SmithCristhian BeckerMDPI AGarticleenergy pricesocio-political crisisregulated clientsEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 11870, p 11870 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	energy price socio-political crisis regulated clients Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
spellingShingle	energy price socio-political crisis regulated clients Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Humberto Verdejo Fredes Benjamin Acosta Mauricio Olivares Fernando García-Muñoz Francisco Tobar Vannia Toro Cesar Smith Cristhian Becker Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile
description	The Chilean socio-political explosion in October 2019 embodies a milestone in Chile’s national history, challenging the current government’s administration and the management of state resources. One of the triggering factors of this crisis was the increase in electricity prices for those clients previously subject to flat pricing. As an example, in 2019, electricity fees increased by 25% at the national level. In order to solve the conflict, the Ministry of Energy proposed a mechanism, applicable for two years, which would freeze energy charges for companies, industries and domestic customers subject to a regulated tariff. This mechanism was employed and would produce a debt favoring generation companies, which could not exceed CLD 1.350 million. This article analyzes the effectiveness of the energy price stabilization mechanism and the effects of the Chilean socio-economic instability—resulting from the aggregated debt generated by the mechanism applicability—on the exchange rate over its duration of operation. The results suggest that the effects of the current law will not fulfill the purpose of tariff stabilization until 2024; additionally, there will be a sustained increase in tariffs until the year 2027.
format	article
author	Humberto Verdejo Fredes Benjamin Acosta Mauricio Olivares Fernando García-Muñoz Francisco Tobar Vannia Toro Cesar Smith Cristhian Becker
author_facet	Humberto Verdejo Fredes Benjamin Acosta Mauricio Olivares Fernando García-Muñoz Francisco Tobar Vannia Toro Cesar Smith Cristhian Becker
author_sort	Humberto Verdejo Fredes
title	Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile
title_short	Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile
title_full	Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile
title_fullStr	Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile
title_full_unstemmed	Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile
title_sort	impact of energy price stabilization mechanism on regulated clients’ tariffs: the case of chile
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/70f8afb2e6864bb09343bef3ec8603a3
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Impact of Energy Price Stabilization Mechanism on Regulated Clients’ Tariffs: The Case of Chile

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