From January 2026, thousands of electricity consumers in Chile will be able to opt for more competitive power contracts, moving out of the regulated segment and into the country’s liberalised electricity market.
This shift will be enabled by the reduction of the connected-capacity threshold from 500 kW to 300 kW, a change promoted by industry stakeholders for more than two years and formalised at the beginning of 2025.
“The market will open up to between 3,000 and 3,500 small and medium-sized enterprises (SMEs), although the transition will not be immediate,” said Eduardo Andrade, Executive Secretary of the Chilean Association of Energy Traders (ACEN).
“The rollout will mirror what happened when the threshold was reduced to 500 kW: in the first year, only 10–15% of the total migrated, followed by 20–25% in the second year, with similar rates over the subsequent three years.”
Most of those initial contracts were signed for four-year terms and proved successful. “Virtually none of those customers returned to the regulated segment; there are only a handful of isolated cases,” Andrade said in an interview with Energía Estratégica.
For this new group of users with connected capacity between 300 and 500 kW, four-year contracts are also expected to remain the standard. This structure meets minimum permanence requirements while still offering flexibility. Over time, however, the market is likely to move towards longer-term agreements in order to secure more competitive pricing.
“Prices are expected to be close to USD 60–70 per MWh, in line with levels seen elsewhere in the Southern Cone, although they will depend on energy volumes, contract duration, location and consumption profiles,” Andrade explained.
The new regulatory framework coincides with a context of electricity oversupply in Chile, driven by weaker-than-historical demand growth. Whereas electricity consumption previously grew one or two percentage points above GDP, it is now expanding in line with the economy—or even below it.
“We currently have three times more supply than peak demand,” the expert warned, a situation reinforced by the deployment of energy storage technologies that allow consumption to be shifted from off-peak to peak hours.
This environment creates opportunities for energy traders, which are able to capture lower wholesale prices and pass them on to end consumers.
While the implementation of the new 300 kW threshold will begin to materialise next year, ACEN is already looking further ahead. The association aims to extend access to the liberalised market to consumers with as little as 100 kW of connected capacity, with the goal of giving customers greater freedom to choose their electricity suppliers.
Distribution Reform in the Spotlight
Looking ahead to the change of government in 2026, following the election of José Antonio Kast as president after a run-off, the electricity sector expects progress on a long-pending issue: reform of the distribution system.
According to ACEN, several aspects must be addressed to avoid market distortions and ensure the long-term sustainability of the system.
The first relates to tariff management in the context of growing distributed generation. If the current model is not revised, higher-income households are more likely to install rooftop solar panels and batteries, while lower-income consumers could end up bearing a larger share of network costs.
The second pillar concerns quality of service, which requires a review of the regulatory framework to ensure adequate performance standards. As a result, a comprehensive reform of the tariff system is seen as essential to adapt Chile’s distribution segment to the new realities of the power market.
