Panama’s National Assembly has begun debating a sweeping overhaul of the country’s electricity sector, as two competing legislative initiatives aim to modernize a regulatory framework that has remained largely unchanged for nearly three decades. The proposals come at a critical moment: distribution concessions are set to expire in 2028, and consumers continue to face recurring blackouts, voltage fluctuations, and slow complaint resolution.
What Happened
Two initiatives are now on the table. The first, Bill No. 705, was presented by the Executive Branch. The second is a bill promoted by Deputy Yamirelis Chong of the Vamos Coalition. Both seek to update the legal framework governing electricity distribution, but they take notably different approaches.
The Executive’s proposal focuses on strengthening oversight and consumer protection. It would empower the National Authority of Public Services (ASEP) to temporarily intervene in the management of a distribution company when there are serious failures in service continuity, appointing an intervener whose fees would be paid by the company itself.
Bill 705 would also require distributors to resolve user complaints within 15 business days, with automatic approval in the customer’s favor if the deadline is missed. Customers who are current on their payments could withhold the portion of a bill under investigation for inconsistencies or atypical consumption.
The bill further stipulates that company appeals would not suspend the obligation to immediately credit compensation for service-quality deficiencies to users’ bills, and authorizes ASEP to collect these amounts coercively, with a 2% monthly late-payment surcharge.
Penalties would rise sharply under the Executive proposal. Maximum fines would increase to $20 million for serious infractions, with the collected money returned to customers through reductions in electricity tariffs. Concession contracts could also be terminated early if accumulated fines and compensation exceed 25% of a distributor’s gross billed revenues from the prior year, or for repeated failures to meet rural electrification targets.
Background
Deputy Chong’s bill takes a different path, focusing on opening the market to competition. It would separate ownership of the physical distribution network from the activity of selling energy, introduce the figure of the independent energy marketer, and create a digital platform managed by the National Dispatch Center (CND) allowing customers to switch providers within 48 hours.
The deputy’s proposal also grants legal recognition to “prosumers” — users who generate their own energy — through net metering, allowing credits for surplus generation of up to 35% of historical consumption. Residential installations of up to 10 kW would be processed within 5 days with automatic approval if unanswered, and bidirectional meters would carry no additional cost. Community distributed generation for condominiums and remote generation would also be enabled.
Looking ahead to 2028, the Chong bill would bar companies repeatedly sanctioned for service-quality deficiencies or investment failures from participating in the tender for the 51% stake in the distribution companies, and would prohibit passing the cost of acquiring shares on to users through tariffs. It would require ASEP to explicitly approve companies’ five-year maintenance and investment plans, structure fines as a percentage of annual regulated revenues — up to 10% for very serious violations — and obligate distributors and marketers to dedicate 0.5% of annual revenues to energy-efficiency programs for users, without billing surcharges.
What This Means for Panama
The stakes are considerable. The outcome of this debate will shape how Panama’s electricity market is structured when distribution concessions come up for renewal in 2028, determining everything from who can operate in the market to how much leverage regulators have over underperforming companies.
For ordinary consumers, both proposals promise stronger protections: faster complaint resolution, compensation for poor service, and mechanisms to contest questionable bills. The Executive bill emphasizes punitive tools and intervention powers, while the Chong bill emphasizes market competition and consumer choice through provider switching.
The debate also signals growing political impatience with persistent service failures. Lawmakers will now need to reconcile two technically and legally complex initiatives, and the decisions made in the coming months will define the relationship between Panamanians, their electricity providers, and the regulator for years to come.
This story was originally reported by La Prensa.