DR1: Spot Market Energy Profitable

Electric generating companies earned at least US$40 million in addition to their normal profitability by purchasing cheaper energy on the spot market, which they later sold at higher prices through the distributors. Diario Libre reports that because of this, EdeNorte, EdeSur and EdeEste also lost the opportunity to save at least US$31 million if they had bought 20% of the energy they trade with on the spot market as established by law. According to the Coordinating Department of the Superintendence of Electricity, during 2005 they only purchased 8%. This situation causes adverse consequences to consumers who are unable to purchase cheaper energy because distributors are buying it at a higher price. Currently, the price of energy on the free market is around 8 US cents per kW/hr whereas through contracts, especially the Madrid Accord, it is closer to 13 US cents per kW/hr. During 2005, distributo! rs only purchased 36% of the energy offered on the spot market, whereas the remaining 64% was purchased by the generators, which later sold it to the distributors a higher prices, based on long-term contracts.