Panama electricity sector regulatory reform

The Panamanian government has initiated legislative efforts to reform the regulatory framework of the electricity sector. Initially, the government introduced Bill 10-26 to the National Assembly to enhance the supervisory and auditing capabilities of the National Authority of Public Services (ASEP).

The legislative process has progressed to the Trade Commission (Commission on Commerce and Economic Affairs) with the debate of Bill 705. This version of the reform incorporates over 115 modification proposals from various stakeholders, including energy generators, distributors, and regulators. A central feature of the bill is the authority to cancel concessions for distributors that fail to meet specific service quality standards, performance indicators, or rural electrification obligations. ASEP administrator Zelmar Rodríguez noted that the reform seeks to penalize poor service quality.

National Energy Secretary Rodrigo Rodríguez highlighted that approximately 5% of households, or roughly 58,000 families, currently lack electricity because distributors deem their areas unprofitable. While the government seeks immediate economic consequences for poor service, some stakeholders have proposed that certain contract termination clauses should only take effect after current concessions are renewed in October 2028.

Following its first debate, the reform—which aims to modernize Law 6 of 1997—has introduced further consumer protection measures. These include reducing timelines for resolving complaints, applying bill credits for service failures, and strengthening compensation for damages caused by power fluctuations. Additionally, Bill 705 includes a provision to prevent market concentration by prohibiting generation companies from seeking new licenses if they already serve more than 30% of national electricity consumption.