The number of users negotiating directly with Enel increased from 428 to 1,129 from one year to the next. The Italian firm has captured about 70% of those customers and in 2018 would have migrated 6,000 GWh.

Migration of regulated to free customers increased 163% in 2018, with Enel leading in transfers

The opportunity to reduce energy-related payments by negotiating directly with the generating companies led to a 163% increase in the number of regulated customers (households and SMEs) that became free during the last year, according to figures from the National Electricity Coordinator (Coordinador Eléctrico Nacional).

The transfer, favored by Law 20,805, which allowed consumers between 500 kW and 5,000 kW to opt to become free customers, implied that in 2017, 428 users were transferred from regulated to non-regulated customers, which translated into a consumption of 34.55 GWh. However, in 2018 the rise was greater, as 1,129 customers switched to the free system.Thus, according to figures from the Coordinator these latter customers collectively consumed 36.25 GWh of energy during the year.

Since 2017 that free customers demand more energy than regulated customers. According to figures from Generadoras de Chile, last December the consumption of all free customers was 3,285 GWh and that of regulated customers was 2,546 GWh.

But what is a free client? It is a user that can directly negotiate the tariff with the supplier without being subject to the prices charged by the distributors. The advantage, according to industry experts, would be that the generators offer lower prices, so it is in their interest to switch to the free system. Since the standard change, hospitals, universities, hotels and factories can enter into direct agreements with energy companies.

The change has had an important impact on consumers, and the Minister of Energy, Susana Jiménez, explained that “during the previous administration the universe of clients that could be regulated was expanded, because the reverse process was seen. It was seen that more customers might want to secure their price through tenders, when in fact the opposite happened”, she said.

He added that “as generation costs have fallen so much, more people have wanted to migrate from regulated to free and be able to sign their own contracts at more convenient prices, given that prices have been falling. We see a very strong migration”.

The boom in the transfer of regulated to free customers in 2018 occurred because “large customers saw that there was an opportunity to reduce their payments by negotiating directly with the generators. In addition, generators such as Colbún offered good conditions to attract new clients,” said Hugh Rudnick, director of Systep and academic at the Catholic University.

Meanwhile, according to the National Energy Commission (CNE) as of November 2018, the commercial, public, residential customer (CPR) led in consumption in the free system with 40.9%. It was followed by the mining sector with 35.4% and the industrial sector with 23.2%.

Demand projection. According to the information available at the time of the preparation of the CNE’s Final Bidding Report, published in October 2018, for 2019 it is estimated that around 400 transfers of regulated customers to the free customer regime will materialize. In addition, the migration will continue over the next five years, reaching a cumulative equivalent transfer in primary substation level energy of 6,049 GWh by 2023.

One of the companies that has led the process is Italy’s Enel, which has captured around 70% of user transfers.

However, from Enel Generación they pointed out that “unlike previous years, in 2019 the percentage of new free customers will go down, since the demand of this sector was covered in previous periods”.