Focus on: Chilean energy coordinator – leading the transition to zero emissions and the role of the in-house legal team

The Chilean transition to zero emissions presents a significant challenge to the current regulatory framework and the role of the Chilean energy coordinator. The actions of various private actors and the emergence of new technologies not explicitly addressed in existing regulations have grown since 2022, creating new situations where the coordinator must make decisions to fulfil its legal mandate. This poses a new challenge for the in-house legal team. The coordinator is legally mandated to coordinate the national energy system based on the principles of security, cost-efficiency, and open access to the grid, known as the ‘Coordination Principles,’ and the applicable regulations. The issue lies in how to address complex cases where explicit guidance on the impact of new technologies or business models on the electric system is lacking, yet taking a position is necessary to fulfil the coordinator’s legal mandate.

Collaborating with technical and commercial teams, the in-house legal team has played a crucial role in driving organisational change to tackle this challenge. The chosen strategy emphasises the importance of the energy law principles as the overarching framework that defines the scope and guides the legal mandate of the coordinator. Consequently, these principles must be upheld even in the absence of explicit regulations. Examples from the past year include the integration of energy storage and addressing the financial struggles faced by some energy companies within the electric system. This new perspective on how the coordination principles drive the role of the coordinator, has established a robust legal and regulatory foundation for its decisions. Consequently, when the coordinator’s position has been challenged by private actors before regulatory or judicial bodies, it has been upheld in nearly 100% of the rulings over the past 12 months. By contributing to the development, application, and defence of this comprehensive strategy, the in-house legal team has assumed a strategic role within the organisation, enabling the fulfilment of the coordinator’s mandate in an ever-evolving energy sector aiming to achieve a zero-carbon Chilean energy system while complying with the coordination principles.