Social Energy Fund (FOES)
Article 118 of Law 812 of 2003 (National Development for the 2003-2006 period) defined the resources coming from eighty percent (80%) of the congestion income calculated by the Administrator of the Commercial Exchange System as part of a special fund. This income is produced by electrical energy exports to neighboring countries as a result of agreements within the Andean Community of Nations.
The Fund was prorogated by Article 59 of Law 1151 of 2007 (National Development Plan for the 2006-2010 period), establishing that the Ministry of Mines and Energy would continue managing the Social Energy Fund as a special account system, intended to cover -from 2007 onward- up to forty six pesos ($46) per kilowatt hour of the electrical energy cost destined for users located in areas of difficult management, rural areas of low development and below average urban areas defined by the National Government. Unregulated users will not benefit from this fund.
Through Articles 3 to 11 of Decree 4978 of December 27th of 2007, which regulated Article 59 of Law 1151 of 2007, the beneficiaries of this Fund were determined according to the following special areas:
Area of Difficult Management: A group of users located within a single SIN connected area, which has continuously displayed one of the following characteristics during the last year: i) 50% or more users in the community have nonperforming loans that have been due for more than 90 days. ii) A level of electric energy loss that amounts to 40% or more, with respect to the energy input of the system that exclusively serves said community, as long as it can be proven that management results have been negative for reasons that cannot be blamed on the dealer in charge. That information must be validated before the SSPD (Superintendence of Public Utility Services) through a certification issued by External Auditors.
Rural Area of Low Development: Rural interconnected zones, with the following characteristics: i)An average quality of life index that is less than 46.6% according to the DNP (National Development Department) and ii) Connected to the SIN. This must be certified by the Mayor or a relevant authority.
Below Average Urban Area: Settlements located in seats of municipal governments connected to the SIN that have the following characteristics: i) Lack electric energy service or obtain it from grids that have not been approved by the Network Operator and ii) They must not be areas where the provision of service has been prohibited according to what has been established y Article 99 of Law 812 of 2003. This must be certified by the Mayor or a relevant authority.
If you wish to read about the allocation of resources, please consult the main Regulations webpage (See "Resolutions" and look for the keyword "FOES").