Low-voltage electricity distribution concessions: Tender timeline

Council of Ministers Resolution 27/2024 of February 23 has been published. This resolution establishes the principles and timeline for awarding municipal concessions for low-voltage (“LV”) electricity distribution. Its purpose is to ensure that public tenders for awarding these concessions are launched in a synchronized manner.

Given the importance of this strategic asset for the country and the objectives of the National Energy and Climate Plan 2030, the government is currently striving to expedite the synchronized launch of these public tenders by the municipalities. This follows the approval of the standard tender documents under Ordinance 397/2023 of November 28. (See post on Standard documents for LV electricity distribution tenders.)

The National Association of Portuguese Municipalities (“ANMP”) considers that having one territorial area covering the entire mainland—as opposed to the three territorial areas proposed by the Portuguese Energy Services Regulatory Authority (“ERSE”)—is the best option since it will safeguard service quality and coverage, promote territorial cohesion, level the structural bases for carrying out the activity, and standardize tariffs throughout the country. However, the adoption of a single large-scale tender (excluding municipalities that reasonably opt for an alternative by October 31, 2024) is likely to prolong the procedure and result in increased complexity. For this reason, the government has set a deadline of June 30, 2025, for launching public tenders to award LV electricity distribution concessions on the Portuguese mainland.

The complete timeline is as follows:

• By July 31, 2024: ERSE will provide municipalities/intermunicipal entities with documentation on the assets and fixed assets allocated to the LV electricity distribution grid.

• By October 31, 2024

(i)           Municipalities/intermunicipal entities will enter an agreement to create a group of contracting authorities.

(ii)          Municipalities/intermunicipal entities that opt not to join the group mentioned in point (i) above must provide technical and financial justifications for choosing a different territorial area and starting a separate public procurement tender.

• By March 31, 2025: Entities that join the contracting authority group will ensure that all necessary resolutions are made for launching the public procurement tender.

• By June 30, 2025: The representative of the contracting authority group will launch the public tender to award concessions for LV electricity distribution on the Portuguese mainland.