High-voltage electricity transmission towers, or pylons, during a sunset. Photo: File photo.
Caracas (OrinocoTribune.com)—By unanimous vote, the members of the Venezuelan National Assembly have approved, in a preliminary discussion, the partial reform of the Organic Law of the Electric System and Service. Presented by Acting President Delcy Rodríguez, the bill aims to reconfigure Venezuela’s energy model by integrating private and mixed capital investment, in a controversial move that could serve to weaken the sovereignty of the Bolivarian Republic.
For several years, the Venezuelan electricity grid has been under severe stress due to criminal US imperialist sanctions and heavy disinvestment. Recently, reports of electricity blackouts and rationing across the country have intensified, driven by five consecutive years of economic recovery and an extreme heat and drought season that has placed added strain on the grid.
The reform was presented this Tuesday, June 2, by Deputy Orlando Miranda, who emphasized from the speaker’s podium that the project is of vital importance. Miranda highlighted that the bill is based on Article 156, paragraph 29, of the Constitution, which places the general regulation of public utility services, particularly the electrical system, under the jurisdiction of the executive branch. He explained that the administration is committed to protecting the National Electrical System (SEN), ensuring comprehensive infrastructure maintenance, and optimizing service to the population.
Structural challenges and institutional reorganization
Miranda explained that the structural and financial limitations currently affecting the SEN stem from increased production demand and the devastating impact of the sanctions led by the US empire since 2015. These unilateral measures paralyzed major thermoelectric projects over the past decade in key regions, including the El Palito plant in Carabobo, Don Luis Zambrano in Mérida, and TermoZulia in Zulia, with the latter currently operating at just 20% capacity.
Comprising 42 articles, the reform proposes diversifying service provision, marketing, and the generation chain. It allows the coexistence of four distinct business configurations under a strict regime of concessions and state supervision:
• State control: The Venezuelan state remains the foundational actor in the system.
• Majority mixed enterprises: Alliances where the Republic retains control with more than 50% of the share capital.
• Minority participation: Companies where the public sector maintains a minor presence, subject to prior state authorization.
• Private companies: Private corporations duly domiciled within the national territory.
One crucial aspect of the draft, noted by the United Socialist Party of Venezuela (PSUV) deputy, is the introduction of civil and criminal liability for service providers, establishing a direct protection mechanism for citizens. If approved, distribution and marketing companies will be legally obligated to financially compensate users for material damages and losses caused by blackouts or poor service quality.
Tariffs, investment, and ideological debates
To attract national and international investors and ensure financial viability, the proposal includes a new tariff scheme “reflecting the real costs of the service while ensuring a reasonable profitability” tied to efficiency, the parliamentarian claimed. However, analysts warn that potential fare hikes could spark internal tensions within Venezuela, where the majority of the population still struggles with low incomes and high inflation.
Additionally, the reform would authorize national and regional authorities to implement flexible fiscal policies, granting temporary tax benefits and exemptions to investors who target the most critical areas of the system. Deputy José Gregorio Correa added that such legislation must guarantee a reliable and secure supply through planning standards, promote investment and competition, facilitate the integration of renewable energies, and contribute to sustainable development.
Many analysts note that while urgent decisions might be necessary to resolve the current crisis, this reform effectively reverses the historic nationalization of the electricity system achieved by President Hugo Chávez, which was a core feature of his anti-imperialist, anti-privatization legacy.
Imperialist siege and structural strains
The severe degradation of the grid is the direct result of a multi-faceted crisis, heavily exacerbated by years of criminal US-led imperialist sanctions. Combined with a prolonged dry season and the energy demands of five consecutive years of economic growth, the infrastructure has faced unprecedented strain, causing blackouts to spread from across the outer regions of the country into Caracas.
Although multinational corporations like General Electric and Siemens recently conducted exploratory visits to key Venezuelan electrical facilities, analysts note that any meaningful re-entry into the domestic market remains severely restricted by Washington’s ongoing blockade, rendering infrastructure rehabilitation an uphill battle under the current unilateral coercive measures.
Venezuela: Record High Electricity Demand Causes Increasing Outages
Debates over sovereignty and privatization
This shift toward private capital has triggered deep anxiety among left-wing and Chavista analysts, who view the legislative push as part of a broader, troubling pattern of structural concessions. Critics argue that since the devastating January 3 US imperialist bombing of Venezuela—which resulted in the kidnapping of President Nicolás Maduro and the murder of over 100 people, including 47 Venezuelan and 32 Cuban soldiers—the administration of Delcy Rodríguez has compromised sovereign decision-making to stave off a total US military occupation.
This legislative overhaul follows a series of controversial moves, including allowing US imperial military overflights, issuing conciliatory statements regarding US-‘Israel’ aggression against Iran, reforming the hydrocarbon and mining laws, deporting former Minister Alex Saab to the US entity, and permitting a US “evacuation drill” at the embassy in Caracas. Experts warn that further concessions—such as a potential International Monetary Fund (IMF) loan, public sector layoffs, anti-worker labor reforms, and a sweeping privatization drive—are on the horizon. Leftist analysts caution that these measures threaten to erode the popular support of the Bolivarian Revolution and compromise the historical anti-imperialist integrity of Chavismo.
Special for Orinoco Tribune by staff
OT/JRE/AU
