The Foundation is to design the System, and submit it to both the Commission and the Energy Ministry for approval. The System is to compensate generators for their fixed and variable costs through determination of hourly price of generation. The aggregate price of generation at the point of exchange in the national grid will include the corresponding cost of transmission. The Energy Ministry has the ultimate responsibility for setting transmission tariffs and the maximum tariffs applicable to final users. Notwithstanding this declaration of freedom, for most generation a concession or license is required.
Hydroelectric generation remains subject to concession.
The Energy Ministry awards such concessions after approval by the Ministry of Environment and Renewable Resources. Thermoelectric generation is subject to license to insure that no technical incompatibilities exist with the operation and development of the national electric grid or with any isolated complimentary grids. Licenses are also necessary for modification of existing thermoelectric generating installations. The Energy Ministry may grant provisional licenses to conduct studies on the expansion of thermoelectric generation. Any request for provisional or permanent licenses is to be published in order to allow third parties to offer objections.