Eight Years of Mismanaged Electricity Pricing: SEC Discovers Methodological Error, Not CNE

A preliminary technical report from the National Energy Commission (CNE) has revealed a «methodological error» in the setting of electricity prices over the past eight years.

The core of the issue, according to the CNE’s document, stems from the dual application of inflationary effects by simultaneously using the Consumer Price Index (CPI) and the current interest rate for non-adjustable operations. This duplication has artificially inflated the regulated rates that millions of Chileans pay.

Despite the CNE claiming to have identified the inconsistency, various sources consulted by El Mostrador contradict this version, asserting that the CNE is attempting to deflect responsibility, as it was in fact the same organization that originally miscalculated, a mistake that went unnoticed and uncorrected for eight years across three governments.

Sources revealed that it was the Superintendency of Electricity and Fuels (SEC) that raised the alarm about the «methodological error,» not the CNE, which had failed to recognize it on its own during this entire period.

Officials from the government told the cited media that alerts emerged only two weeks ago and confirmed that the issue originated from the SEC, rather than the CNE. Other sources added that the sequence of discovery was as follows: “after the SEC identified the error and presented it to the CNE, the latter defended the methodology until it was eventually the Commission for Financial Market (CMF) that confirmed the significant mistake.”

Magnitude of the «Methodological Error»

The immediate implications of this «methodological error» relate to its impact on the rates paid by consumers. Industry sources in the electricity market warn that this is the largest mistake ever made by the CNE in the institution’s history, estimating a cost of 100 million dollars, which only reflects the accumulated benefits to generators over the last two years.

Sources agree that, “if the total period since 2017 is considered—when the error originated—it is impossible to accurately assess the total amount of money involved,” reported El Mostrador.

The government’s decision, explained the sources, is merely to correct the error from 2024 onwards. However, they argue that the regulation should be retroactively applied from 2017. The CNE’s calculations for correction would only address the last four tariff decrees, corresponding to the last two years, despite the body acknowledging that the issue dates back to 2017 in its formal statement.

Government Reaction

In light of the controversy, Energy Minister Diego Pardow addressed the preliminary nature of the report, stating that a final assessment must be completed by his department before a tariff decree can be issued.

“We, as the Executive Power, are focused on implementing this methodological change as soon as possible to ensure that electricity bills decrease in January and rectify this overestimation that occurred regarding the differences in bills,” declared Pardow.

From the opposition—specifically the UDI and the Republican Party—there have been announcements of a Constitutional Accusation against the state secretary, while from the ruling party, presidential candidate Jeannette Jara of Unidad por Chile termed the situation “unacceptable” and demanded accountability.

“The CNE designed a formula years ago with a methodological error since 2017. It is unacceptable. It is intolerable that a technical error has persisted for so long. It is necessary to refund the overcharges and assume the corresponding responsibilities,” she asserted.

Average 2% Reduction in Tariffs

The CNE report indicates that the methodological correction will allow for an average 2% reduction in electricity tariffs starting January 2026. However, the significant issue that remains is the refunds for the overcharges accumulated since 2017.

Original article: 8 años, 3 gobiernos inflando la luz: la SEC —no la CNE— detectó el “error metodológico”