Summary

Decree-Law 184/2003, of 20 August, establishes the conditions under which traders and external agents may develop their activity in Portugal.

Decree-Law 184/2003, of 20 August, establishes the conditions under which traders and external agents may develop their activity in the Portuguese electricity market.

These new operators of the electricity market were created by Decree-Law 185/2003 of 20 August and it is now required to establish the rules that will govern their activity in the Portuguese market.

The traders are in charge of wholesale purchasing of electricity and of selling it to other traders (wholesale) or to customers (retail). They may act on their own behalf or on behalf of third parties. They are required to obtain a license for the trading of electricity from the General Directorate for the Energy market (Direcção Geral de Energia – "DGE").

Trading licenses do not have a pre-established duration. However, only companies incorporated under the laws of Portugal and adopting one of the legal forms established in Portuguese law may apply for such licenses. Also, the applicant should evidence before the DGE that it possesses the appropriate technical and financial capabilities.

It also should be noted that the trading licenses granted by DGE may be transmitted to a third party. An authorisation of DGE is, in this case, required and shall only be granted if the conditions under which the license was initially granted are to be complied with the new licensee.

As to external agents, they purchase electricity and place it in their market of origin, in an organised market or through bilateral contracts. They may also sell the electricity as of their market of origin, in an organised market or through bilateral contracts.

External agents should be duly authorised by the electrical systems where they will be purchasing and/or selling power in the course of their activities.

In Portugal, registration before the DGE is required. When applying for such registration, external agents should evidence technical and financial capabilities similar to those required for traders. In addition, they should provide an internationally valid document evidencing that they hold the right of purchasing and selling electricity in their country of origin.

Registrations of external agents have also no pre-established duration. However, unlike the trading licenses, they cannot be transferred to third parties.

© Macedo Vitorino e Associados – August 2003

This information is provided for general purposes only and does not constitute professional advice. If you have any question on a matter of Portuguese law you should contact a lawyer registered to practice law in Portugal. If you are a client of Macedo Vitorino e Associados, you may contact us directly at mva@macedovitorino.com or your usual contact partner.