Law Regulation For The Granting Of Concessions Of Power Generation Projects On Small Scale.


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1 Decree No. 460 the Legislative Assembly of the Republic of EL SALVADOR, considering: I.-that by Legislative Decree No. 843 of dated October 10, 1996, published in the Official Journal No. 201, vol. 333, of the 25th of the same month and year, passed the General Law of electricity.
II. that by means of Decree Executive No. 70, dated July 25, 1997, published in the Official Journal No. 138, vol. 336, of the same date, was issued the regulation of the General Law of electricity.
III. that articles 5 and 12 of the General Law of electricity; 4, 12 and 51 of the rules of that law, established that the generation of electricity from hydraulic and geothermal resources, would require of concession granted by the SIGET, being these concessions of permanent and transferable.
IV.-that the judgement of unconstitutionality dictated the twenty-seventh day of June of two thousand twelve in the referral process 28, 2008, the constitutional of the Supreme Court of Justice Division, declared unconstitutional articles 5 and 12 of the General Law of electricity; as well as articles 4, 12 and 51 of the regulation of the law, establishing that, given the public character of used goods, the authority to lease an activity that has hardware and inescapable as the exploitation of a good demanial, requires authorization of the Legislative Assembly, holding it to a defined period. It also determined that the SIGET is the entity responsible for supervising and monitoring the implementation and compliance with the conditions of the concessions for the exploitation of resources hydraulic and geothermal, as the Agency through which the State oversees the provision of the public service of electricity.
V that is of primary interest for the country, the expansion of the energy matrix and use and exploitation of the energy generated by renewable resources.
VI.-that there are currently several small projects, usually for community use for own consumption of private clients, with a capacity less than or equal to five megawatts, in advanced stage of development the process of granting concessions must be regulated in accordance with the ruling of unconstitutionality.
VII.-that due to the technical complexity and regulatory information that requires the procedure for the generation of electricity from hydraulic and geothermal resources, is considered necessary to legislate a procedure for the processing of award for 2 electric power generation projects using the resource hydraulic geothermal with less or more than five megawatts.
Therefore, use of his constitutional powers and at the initiative of MEPs: Francisco Roberto Lorenzana Durán, Ana Vilma Albanez de Escobar, José Francisco Merino López, Lorenzo Rivas Echeverría, Bertha Mercedes Avilés de Rodriguez and martyr Arnoldo Marin Villanueva.
DECREES the following: law regulating for the granting of concessions projects of generation electric in small scale chapter I object of LA Law Art.1.-La present law aims to establish a mechanism for the granting of concessions to natural or legal persons, that operate power plants of alternative energy ica of small-scale, with a nominal capacity equal to or less than five megawatts.
Art.2.-concessions will be approved by the Legislative Assembly by Decree; establishing the conditions for the use of the resource, and a term which may not exceed fifty years.
The General Superintendence of electricity and telecommunications, which hereinafter is referred to as SIGET, shall be the competent entity to process the respective procedure until the stage prior to its approval.
Art.3.-the procedure for the award of projects referred to in this law, will not require bidding for the resource.
Art.4.-each concession just may have a power generation. However, the same natural or legal person may be more than one concession holder, provided that it does not exceed the rated capacity of five megawatts.
Article 5.-the time limits for the processing of the concessions will be counted in days, they shall be peremptory and extended, unless duly justified cause.

3 Art.6.-natural or legal persons interested in obtaining a concession, for the generation of electricity with hydraulic or geothermal resources, must submit written request to the SIGET, which shall comply with the provisions of this law and other provisions of the legislation which applies.
Chapter II procedure for the granting of the concession.7-the natural person or legal interested in obtaining a concession, must submit the completed form and the following annexes: a) Declaration before a notary of the implementation of a programme of corporate social responsibility, which will be developed on the site in which the central, is installed to contribute to the social and economic development;
(b) feasibility study with positive result of the project, that includes descriptive report of calculations, designs and drawings relevant;
(c) in the case of hydroelectric projects, environmental building permit for purposes of power generation, extended by the Ministry of environment and natural resources, river or channel, with its specific location, shown in geographic grid of appropriate scale, detailing the techniques to be used and the geographic scope of the same;
(d) environmental impact assessment, approved by the competent authorities, when it is obligatory according to the scale of the project;
(e) project data that allow the systematic and continuous evaluation of the effects of it and its associated works, in their stages of construction, operation and abandonment; as well as the comparison of the various options, taking preventive measures, and the detail of the main works and actions to be taken to mitigate the adverse effects on their environment, both the environment and the population, and the way in which will ensure the good condition and the functionality of the works; and, f) any other information which, according to the nature, are required by the law applicable to the matter.
Art.8-within fifteen days of the date of filing of the application, the SIGET shall issue resolution, allowing or preventing, if in the documentation submitted by the requesting party, be advirtieren deficiencies formal, unintelligible or that according to its nature, there is a possibility to be remedied, will prevent the fulfilment or clarification of such aspects, as the case may be; giving an additional period of ten days to the interested party, who only once may request extension of the same, justifying the reasons for this, and the SIGET must resolve in the same time period granted for the implementation of prevention, on the request for an extension.

4. inside of the fifteen days following compliance with the prevention or its extension, the SIGET must resolve on the admissibility or inadmissibility of the request. This last situation will only proceed when the applicant does not comply with the prevention in due time, or do it poorly.
The Declaration of inadmissibility leaves to retain the right to resubmit the request, complying with the requirements that the law.
Art.9.-If it determines the feasibility and advisability of granting the concession, the SIGET will agreement admitting the request, ordering the publication of the data of the project, and will report to the Legislative Assembly.
Related publication is intended, anyone to submit comments on the draft to the SIGET, and it must be carried out in two newspapers of national circulation prior to continue with the procedure, at the latest within five days after the issuance of the agreement, and on two occasions with an interval of a day between them. The costs of publication shall be borne by the applicant.
Art.10.-over the period referred to in the preceding article, if you have not submitted observations, the SIGET will have ten days to assess the documentation of the project and issue an evaluation report.
The SIGET shall be sent to the Legislative Assembly duly registry full record, the evaluation report and a project of the concession contract.
The evaluation report referred to in the preceding paragraph shall contain, as a minimum, the following information: a) description of the main facilities, geographical location of the plant and access routes;
(b) initial installed capacity, annual power generation estimated, if the project is capable of expansion, and estimated final power;
(c) global amount of investments and form of financing;
(d) term of execution and estimated date of entry into operation; (and e) capacity of employment during construction and operation.
Draft concession contract, must contain as a minimum: a) General data dealer and his representative when appropriate;
(b) scope of the grant in terms of geographical coverage and the energy resource;

(5 c) period suggested for the grant and the reasons justifying it;
(d) terms under which is awarded the concession;
(e) Causales of suspension and termination, as well as the forms of proceeding in one or another case;

(f) obligations and rights of the parties in the construction and operation of the project, until the expiry of rights or the abandonment of the same; including the description and content of the reports that shall be submitted by the dealer to SIGET;
(g) obligations of the concessionaire to ensure the efficient, rational and sustainable use of the resource, and the preservation of the installations of the complex;
(h) guarantee of strict compliance with the contracts for the projects under construction, by a fifteen percent (15%) of the amount of investment;
(i) guarantees and insurance of damages, risks to third parties and the environment; and j) environmental commitments over the work to develop actions to take and reports to submit to the SIGET.
Essential annexes to the contract, such as: to) economic technical project document;
(b) the project location maps object of the concession, in relation to watershed, human settlements, wiring, where they exist; and other important elements of the area;
(c) detailed timetable for construction and operation, and periodic progress reports;
(d) updated documentation of all rights and permanent permits required for the feasibility, implementation, exploitation and operation of the project; (and e) updated documentation of land, easements, flood-related rights, use of wells, Wells platforms and any other facilities or real estate.
Art.11.-the Assembly legislation, through the respective Commission, will review and evaluate the application and documentation sent by the SIGET, effect of observing or give opinion on the granting.
In the event that the legislature, through the respective Commission, note inconsistencies and defects in the documentation submitted, it will do so from knowledge of the SIGET issue report about it within a period of twenty days.

6 received the report, the Legislative Assembly through the respective Commission deliver opinion on the concession.
Art.12.-the Decree legislative approval of the grant, will be communicated to the Prosecutor General of the Republic so that it sign the corresponding contract and the effects specified in article 193 of the Constitution.
This Decree will establish procedures to modify the grant or the contract, subject to change clauses and the procedure of recourse for the settlement of disputes.
Within twenty days following the publication of the referred decree, the Prosecutor General of the Republic and the dealer will sign the corresponding contract of grant, which must be granted in writing public and entered in the register of electricity and telecommunications, attached to the SIGET.
Chapter III contract of concession and his execution Art.13.-after signed the contract of concession, the dealer will have a maximum period of one hundred twenty days, to present the document to the SIGET, containing estimates and final engineering designs of hydraulic project and the initial stage of the geothermal project, which includes technical specifications for studies such as gauges, piercings, equipment, rules and standards, drawings of conceptual design or level constructive if available; as well as a copy of the corresponding environmental permit.
The date in which the concessionaire shall deliver to the SIGET information before mentioned, must be explicitly established within the contract, and the dealer may not give home to field activities while you have not supplemented this requirement.
Art.14.-foreign dealers must establish a branch office or a new company based in El Salvador for the implementation of the project within ninety days of the signing of the contract. This branch or society must be duly constituted and registered in the trade register, for the exercise of its functions in accordance with the laws of the Republic of El Salvador.
Article 15.-all concessionaire shall inform the SIGET, before hiring new works, the technical characteristics of any extension or modification of the installations, projects to the SIGET to promptly verify that such extensions or modifications correspond to the concession.
Information about projected expansions can be supplied in the forms for registration of facilities provided by the SIGET.

7 Art.16.-the SIGET will be responsible for overseeing and enforcing the contract during the stage of implementation, generation, operation or abandonment of the concession. Also inform the Legislative Assembly, and to the Prosecutor General of the Republic, at least once a year, the State of each of the concessions and the fulfilment of contractual obligations.
Chapter IV provisions General 17.-in the case of projects under one hundred kW (100 kW), exempted presentation of the environmental documentation; However, the SIGET shall communicate on request to the Ministry of environment and natural resources, which hereinafter is referred to as MRNA, that wiil visit referred to in this article.
This does not relieve the licensee of the obligation to maintain, monitor and correct at all times the adverse effects to the environment that may occur during construction or operation, as required it the SIGET or MRNA.
Within eight days after the date of filing of the application, the SIGET and MRNA will make a visit to the project to know the scope of it. MRNA will forward to the SIGET consistency of categorization of the project within a maximum of five days after carried out the visit.
Art.18.-for projects of geothermal resources, the applicant shall submit to the SIGET, a study of environmental impact (EIA) General approved by MARN, with reference to the Prefeasibility which consists of records of SIGET.
The foregoing, conditional on that, once conducted the study of feasibility or final engineering, present the study of environmental impact (EIA) specific project which will assess the features designed for the construction, operation and abandonment.
Art.19: the Prefeasibility should be an essential component in the programming of the development of the feasibility study, included in the application and in the contract.
Art.20.-the applicant should submit to the SIGET, documents approved by the MRNA to be incorporated as an integral part of your application. The SIGET will verify that the technical draft which served as the basis for the approval of the environmental impact study, is the same used in the grant application and the study of feasibility or final engineering.
Art.21.-when the concession project is at the stage of operation, the licensee must deliver to the SIGET studies including the memories of calculations and drawings known as built. The deadline of the above information, will be established in the concession contract.

8 chapter V termination, resignation, transfer and modification of concession art. 22.-the concessions contract terminated by any of the following causes: to) end of the period laid down in the grant;
(b) waiver of the concessionaire;
(c) non-compliance with the conditions and obligations stipulated in the concession and the respective contract; and, (d) by court decision;
Termination of the concession contract extinguish the rights of the concessionaire.
Article 23.-before the occurrence of any of the reasons referred to in the preceding article, the SIGET must issue the corresponding agreement and immediately inform the Legislative Assembly so that this decision in this regard and to the Prosecutor General of the Republic; This is without prejudice of fines or penalties to give place in accordance with the applicable legal system.
Art.24.-concessions can be transferred, having the new concessionaire to serve the requirements and obligations that the law at the time that this happens. In any case the transfer of the concession, can expand the low period which was originally granted.
In the case of renunciation or transfer of a concession, the SIGET will issue the respective agreement that will be sent to the Legislative Assembly for the corresponding legal effects.
Only a concession is transferred when the project is producing power, and in any case within two years of having started the production.
Transfers of concession through sales of shares, changes name of entities or partners, may be or such stock movements may lead to dissolution of the obligations and guarantees held by the holder of the concession, or alienation of the energy resource, without the knowledge of the SIGET and approval by the Legislative Assembly.
Art.25.-the Assembly legislative will have the right to terminate a grant pursuant to the literal b, c, and d, of article 22 of this law.
Art.26.-declared the termination of the concession contract, facilities and other property necessary for the utilization of the resource of the concession, will be transferred to the State by Ministry of law.


The Legislative Assembly shall entitle CEL in transient form management the operation of facilities in accordance with article 112 of the Constitution of the Republic, in order to ensure the continuity of energy supply, keeping the SIGET faculty monitoring and supervising this operation and initiate the procedure for the approval of a new concession which shall notify the Legislative Assembly.
Art.27-A request of the licensee, the terms of the contract may be amended by the Legislative Assembly, following the same procedures for its issuance, with the exception of the publications referred to in article 9 of this law; in any case, will require a favourable technical report of the SIGET.
Art.28.-in cases where referred to in the contract generation capacity must be expanded, either at the same site or at a location of the concession area, corresponding modification will be considered integrated with the original capacity, and shall be subject to the presentation of the corresponding feasibility study and evaluation by the SIGET.
Chapter VI infractions and sanctions Art.29.-in the event that dealers commit any offences classified in the present law, the SIGET must instruct the sanctioning procedure, pursuant to the General Law of electricity. The responsibilities arising from this procedure, shall be independent of the civil or criminal liability that may exist for the same acts, according to the laws of each subject.
They are very serious breaches: to) exploit resources hydraulic or geothermal for electricity generation without the granting for that purpose;
b) generation activities without being entered in the register of the SIGET;
(c) failure to comply with the term start of commercial operation of the project established in the concession contract; except for just cause;
(d) refuse to the SIGET information required for the technical analysis of the behavior of the concession;
(e) carry out increases in capacity in projects awarded without proper authorization;
(f) not submit periodic reports of operation according to the period specified in the concession contract;

10 g) not realize, to their cost, monitoring and supervision of engineering for the installation of generation equipment necessary for the operation of the concession resource;
(h) not promptly reporting faults in the geothermal or hydroelectric complex concession; e, i) any other failure to comply with the provisions laid down in the concession contract;
Art.30.-the infringements referred to in this law, shall be punished by the SIGET in proportion to the infringement and the generation capacity, with a fine of up to fifty thousand dollars of the United States of America.
The value of the sanction must be updated by the SIGET, taking the price index consumers published by the Ministry of economy as a parameter.
Art.31: the present law shall enter into force eight days after its publication in the official journal.
GIVEN in the blue room of the Legislative Palace: San Salvador, twenty-two days of the month of August of two thousand thirteen.
ROBERTO JOSE D'AUBUISSON, fifth Vice President.

11. presidential House: San Salvador, to the seventeenth day of September in the year two thousand thirteen.
PUBLISHED, Carlos Mauricio Funes Cartagena, President of the Republic.
German Jose Armando Flores, Minister of economy.
D. OR. No. 178 volume Nº 400 date: September 26, 2013 JQ/adar 31-10-2013 legislative index