Chilean Government Proposes Legislation to Manage Electricity Debt and Tariff Hikes

The Chilean government has introduced a bill to address approximately US$ 900 million in debt owed to energy distributors, aiming to mitigate upcoming electricity tariff increases for consumers.

Key points

• The initiative proposes using a reduction in the Client Protection Mechanism (MPC) charge starting in 2028 to help settle the debt through 2035.
• The bill includes a new version of the electricity subsidy for the 40% most vulnerable households and electro-dependent individuals.
• The government seeks to extend the 2024-2028 Distribution Value Added (VAD) decree until 2030 to prevent future administrative delays.
• The proposal has been submitted to the Chamber of Deputies with a request for immediate discussion to expedite its passage by July.

Why it matters

The legislation is a critical effort to stabilize energy costs for families and small businesses while resolving long-standing financial obligations within the national power sector.