Municipalities may replace EDP in the distribution of electricity

Competition for electricity distribution concessions advances in 2019. ERSE says that there are already municipalities interested in replacing EDP Distribuição. The regulator entity is launching a public consultation for the proposals today

There are municipalities interested in replacing EDP in the distribution of electricity to family households and to small and medium-sized companies. Several municipalities, particularly in the north of the country, have expressed interest in making direct use of the electricity distribution in the low voltage grid, as guaranteed by the energy sector regulator. But the municipalities that choose this route "have to present an economic study," Cristina Portugal, president of ERSE - Regulator Entity of Energy Services, explained. "It is the municipalities that decide whether to explore it or not", she affirmed, yesterday, in a meeting with journalists about the subject.

Municipalities have a historic right to low-voltage electricity distribution concessions, but at the moment, with the end of the contracts with EDP, they can choose between doing a new concession, possibly with new operators, or assuming direct management of the network. In the latter case, they cease to receive annual revenues and have to reimburse EDP for the assets of the network that concern the concession in question. If they chose the concession, in addition to revenues, they may receive an additional amount from the concessionaire but it cannot be passed on to the tariffs and to the customers.

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