Panama Electricity Reform Faces Line-by-Line Assembly Debate This Week
PANAMA · ENERGY
Key Facts
- —The country Panama, a dollar-using Central American nation, where three part-state-owned firms hold power distribution concessions expiring on 21 October 2028.
- —The background Bill 705, the Panama electricity reform from President José Raúl Mulino’s government, rewrites Law 6 of 1997, the power sector’s rulebook.
- —Why now The Assembly’s Commerce Committee closed hearings after reading over 115 proposed amendments. It debates the text article by article from Tuesday 6 October.
- —What happened After objections from power companies, deputies filed amendments to change how a generation cap is measured and delay some cancellation rules.
- —The numbers Proposed fines go up to US$20 million. About 58,000 families still have no electricity, close to 5% of households, the energy secretary says.
- —What it means for you Faster refunds for poor service are promised, but the regulator says the bill as drafted cannot guarantee lower electricity tariffs.
- —Still open When the committee votes, which amendments survive, and whether new bidders compete for control of the three distributors.
The Panama electricity reform moves to a line-by-line debate on Tuesday 6 October in the National Assembly’s Commerce Committee. The committee closed its public hearings last week after reading more than 115 proposed amendments from companies, users and officials.
Bill 705, sent by President José Raúl Mulino’s government, rewrites the 1997 law that sets the rules for Panama’s power sector. The deadline is 21 October 2028, when the concessions of the three companies that deliver electricity to homes expire.
What Happens in the Assembly on Tuesday
Panamanian bills pass three debates: the first in a committee, the second and third in the full chamber. Bill 705 entered the first stage on 22 September, when the Commerce and Economic Affairs Committee opened hearings.
That earlier phase is covered in Panama Energy Law Reform Returns to Committee as 2028 Power Concessions Approach, published on 30 September. During three days of hearings, generators, distributors, users and state bodies filed more than 115 amendment requests.
The committee read them out on Thursday 1 October and then adjourned until 6 October, Panamá América reported. From Tuesday, deputies decide which changes go into the text before they vote on it.
Committee chair Jamis Acosta said the panel would send a solid bill to the second debate, according to La Estrella de Panamá. According to Panamá América, he said the changes answer the public outcry over tariffs, customer service and quality of supply.
New Rules for the 2028 Power Concessions
Three companies hold Panama’s distribution concessions: ENSA, controlled by Colombia’s EPM, and EDEMET and EDECHI, both run by Spain’s Naturgy. The state keeps just under half of each, and the private controlling stakes (a little over half) must be put up for sale before the 2028 expiry.
Under the Panama electricity reform, new concessions would last 15 years, Eco TV reported. Every bidder, incumbents included, would first have to prequalify by showing experience and technical, financial and operating strength.
Incumbents could still match the best offer, Infobae reported. But one that inflates its price to keep control would owe the Treasury the gap to market value or the next-best bid.
Energy Secretary Rodrigo Rodríguez told the committee that rivals stayed away in 2012 and 2013, knowing the incumbent could match any bid. The bill also adds grounds for cancelling a concession, such as repeated quality failures, unbuilt investments and abandoned rural projects.
A concession could also end if tariff cuts, penalties and fines exceed 25% of a distributor’s annual billing. Pro-government deputies have proposed that some grounds apply only from 22 October 2028, a nod to distributors, Panamá América reported.
Generation, Grid Control and Rural Power
On generation, the government proposed barring any group that supplies more than 30% of national consumption from seeking new licences. Today’s 25% cap mainly covers hydropower; the bill would extend it to solar, wind and thermal plants.
The generator AES Panamá objected that the rule could keep it out of new tenders until 2054, Infobae reported. Amendments filed by Acosta and other deputies would measure the 30% against installed capacity instead, as AES had asked.
Deputies also proposed four articles giving technical and functional independence to the National Dispatch Centre, which runs the grid in real time. It would stay inside ETESA, the state transmission company, but its head would serve a seven-year term.
The Panama electricity reform would also make distributors take power to poor, remote areas outside their concession zones. Rodríguez says about 58,000 families, close to 5% of households, still live without electricity.
Costa Rica and Nicaragua, by contrast, are close to full coverage, he said on Sunday, Destino Panamá reported. The state’s Rural Electrification Office would keep planning the work, Infobae reported.
Bills: Faster Refunds, No Promise of Cheaper Power
For households, the main change in the Panama electricity reform is faster redress. Distributors would have 15 days to compensate customers who win a complaint, and reports differ on where fine money would go: the energy secretary says affected users would be compensated first, while other reports say it would go to the National Treasury.
The bill also updates the formula for distributors’ allowed profit to reflect Panama’s current credit rating and economy. Fines on failing providers could reach US$20 million, according to Infobae.
Lower tariffs are not part of the promise, Eco TV reported. “The law as it stands cannot guarantee a reduction in the tariff,” said Zelmar Rodríguez, who heads ASEP, the utilities regulator.
For now, a state subsidy of about US$32 million shields 76% of customers from the latest tariff rise, TVN Noticias reported. It runs until 31 December.
Who Backs the Bill and Who Wants More
The government, the energy secretariat and the regulator support the Panama electricity reform. Minister of the Presidency Juan Carlos Orillac presented it in September, after the cabinet approved it on 16 June.
The distributor ENSA told the committee it broadly backs the proposal, while asking for clear criteria on fair market value. Vamos, a bloc of independent deputies, wants a deeper overhaul.
Vamos deputy Yamireliz Chong said Panamanians expected at least cheaper electricity, and that this is not “what is in this bill”. Her group’s own text, Draft Bill 181, would let large customers choose their supplier through independent retailers.
That option could later reach households, according to Infobae. Rodrigo Rodríguez rejected the idea that such retailers would make bills cheaper, Destino Panamá reported.
A Separate Veto on School Textbooks
Separately, Mulino has partially vetoed Bill 546 on school textbook reuse, sponsored by independent deputy Betserai Richards. It would make Education Ministry-approved textbooks valid for five years and require schools to allow reuse when content is unchanged.
In a letter dated 29 September, he called a ban on sales inside private schools unconstitutional, La Estrella de Panamá reported. He judged two other clauses inadvisable.
CONEP, Panama’s National Council of Private Enterprise, had urged him in September to veto the bill. The Assembly must now decide how to respond to his objections.
What Comes Next
The committee resumes on Tuesday 6 October with the deputies’ amendments. A first-debate vote would send the Panama electricity reform to the full Assembly, where no date has been announced.
The tender for the distributors’ controlling private stakes must be called by October 2027, bill or no bill, ASEP’s head has said. The reform would not cut bills on its own; its real test is whether new bidders turn up.
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What is Panama’s Bill 705?
It is the government’s Panama electricity reform, which amends Law 6 of 1997 on the power sector. It tightens service-quality rules, sets terms for the 2028 distribution concessions and widens rural electrification duties.
Will electricity get cheaper in Panama?
Not necessarily. ASEP, the regulator, says the bill as drafted cannot guarantee a tariff cut. A temporary state subsidy holds bills steady for 76% of customers until 31 December 2026.
Who supplies electricity to homes in Panama?
Three distributors: ENSA, controlled by Colombia’s EPM, and EDEMET and EDECHI, run by Spain’s Naturgy. The state owns just under half of each, and their concessions expire on 21 October 2028.
What did Mulino veto?
He partially vetoed Bill 546 on school textbook reuse, objecting to three of its articles in a letter dated 29 September. The bill went back to the National Assembly, which must now decide how to respond.
Sources: La Estrella de Panamá, reform faces first debate, 5 October 2026; Panamá América, committee enters first debate, 2 October 2026; Panamá América, amendments for companies, 2 October 2026; TVN Noticias, first debate next Tuesday, 1 October 2026; Destino Panamá, Bill 705 ready for first debate, 4 October 2026; Eco TV, no guaranteed tariff cut, 30 September 2026; Eco TV, committee hears distributors, 29 September 2026; Infobae, energy secretary on concession rules, 22 September 2026; Nexo, 51% stake tender timetable, 24 September 2026; TVN Noticias, US$32 million tariff subsidy, 9 September 2026; La Estrella de Panamá, Mulino vetoes textbook bill, 5 October 2026; Panamá América, eight bills vetoed in two days, 4 October 2026; Telemetro, CONEP asks for veto of bills 546 and 415, 4 September 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief