Electricity Reform

The head of Honduras's small-business chamber, Victorino Carranza, called on Congress's recent electricity system reforms to cut operating costs for micro and small enterprises, saying companies should pay only for energy consumed and that unpredictable rates now hamper financial planning.

Lawmakers are intensifying negotiations to break a months-long deadlock over reforms to Honduras's electric power system, with legislators aiming to bring the bill to a final vote this week after incorporating opposition demands to protect state assets and reduce consumer costs.

The electricity regulator Héctor Corrales urged Congress to approve proposed reforms to the power sector that would enable competitive bidding for contracts, arguing such measures are essential to lower and stabilize rates—a stalled bill facing Liberal Party opposition.

Negotiations over a sweeping overhaul of Honduras's electricity system have hit a standstill in Congress after the Liberal Party created additional review committees, delaying a final committee report and blocking a floor vote despite weeks of technical work with private generators and international experts.

Honduras's Energy Commission is reviewing a Liberal Party counterproposal for restructuring the state electric utility into three operating subsidiaries, aiming to attract private capital for modernization while keeping state ownership of major generation and transmission assets.

Congress plans to vote next week on restructuring the state electricity company to stem annual losses exceeding 16 billion lempiras (about $640 million), but passage depends on the Liberal Party's backing and its proposed reverse-auction mechanism for energy procurement.

The electricity regulator said it will evaluate the Liberal Party's counterproposal for power-sector reforms, insisting any changes must balance lower tariffs, fair competition, and fiscal impact while rejecting open-ended incentives.

The head of Honduras's electricity regulator says delays in the Liberal Party's response to proposed power-sector reforms risk prolonging electricity supply problems and preventing competitive bidding processes needed to lower rates.

President Nasry Asfura called on lawmakers to pass reforms to the Electricity Sector Law to address the state power utility ENEE's monthly losses of approximately 1.2 billion lempiras (about $48 million), which he said strain the government's capacity to fund health, education, and infrastructure.

Honduras's power utility ENEE loses more than L17 billion (about $680 million) annually to technical inefficiencies and electricity theft, representing 35% of total output; Congress is advancing reforms to reorganize ENEE into subsidiary units for generation, transmission, and distribution, strengthen the regulatory commission, and establish an independent market operator.

The Liberal Party's congressional delegation will present next week an alternative to the governing party's proposed reforms to the electricity sector, focusing on two disputed articles while seeking to rescue the state utility without privatization.

Congressman Arnold Burgos says the government lacks 13 votes from the opposition Liberal Party to pass reforms to Honduras's electricity sector, while denying plans to privatize the state utility ENEE.

The head of Honduras's business association warns that the state power utility ENEE has 122 billion lempiras ($4.9 billion) in liabilities against 54 billion in assets, and risks having to return to costly diesel generation unless Congress approves new energy legislation and competitive bidding within months.

Congresswoman Marixa Julín (PINU-SD) said Honduras's power crisis demands reform, noting that companies owe the state power utility nearly 20 billion lempiras ($800 million) and that outdated contracts dating to the 1990s energy crisis must be renegotiated to protect consumers and reduce losses.

The organization Sendas warned that Honduras's planned electricity-sector reform needs a dedicated, autonomous administrator with real decision-making power to implement structural changes, noting that fragmented responsibility across multiple agencies and weak institutional continuity have hindered past efforts.

Congress began debate on sweeping reforms to Honduras's electric utility ENEE, aiming to reshape its corporate structure and finances to address the state company's L50 million daily fiscal deficit before lawmakers begin mid-year recess.

A Fosdeh economist argues that measures now being negotiated to stabilize Honduras's state electric utility must become permanent policy to prevent future administrations from reversing reforms, as has happened repeatedly.

Honduras's electric regulator (CREE) published a comparative analysis of the electric-sector reform bill showing how negotiations between the President, Congress, and the Liberal Party shifted the final version approved on August 12, with added restrictions on state utility ENEE.

Honduras's Liberal Party announced it will not support the government's electric-sector reform as written, instead proposing its own bill to preserve ENEE's public status, prevent privatization, and include workforce protections, fair tariffs, and financial audits.