Dams and markets: Rivers and electric power in Chile

Natural Resources Journal

Volumn 49, Issue 3-4, 2010, Pages 583-651

  Bauer, Carl J ^a,b,c,d  

^a UNIVERSITY OF ARIZONA   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

^c UNIVERSITY OF WISCONSIN MADISON   (United States)

^d YALE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

DAM; ELECTRICAL POWER; ENERGY POLICY; ENERGY USE; HYDROELECTRIC POWER; NEOLIBERALISM; POWER GENERATION; PRIVATIZATION; PROPERTY RIGHTS; RIVER SYSTEM; WATER MANAGEMENT;

CHILE;

EID: 77955327124     PISSN: 00280739     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (425)

1. See infra Part V.
2. Christián Viancos, Hidroeléctricas Retoman Fuerte Protagonismo en Inversiones, EL MERCURIO (SANTIAGO), Aug. 29, 2005, at B1, available at http://diario.elmercurio.cl/detalle/ index.asp?id=%7B51f15806-c770- 48ca-9f2b-62845bb85c96%7D [hereinafter Viancos, Hidroeléctricas Retoman Fuerte Protagonismo];
3. Christian Viancos, 23 Nuevos Proyectos Avivan Oferta Eléctrica, EL MERCURIO (SANTIAGO), Aug. 29, 2005, at B9, available at http:// diario.elmercurio.cl/detalle/index.asp?id=%7B51f15806-c770-48ca-9f2b- 62845bb85c96%7D [hereinafter Viancos, 23 Nuevos Proyectos];
4. Christian Viancos, La Milionaria Agenda Eléctrica, EL MERCURIO (SANTIAGO), May 21, 2006, available at http://diario.elmercurio.cl/detalle/ index.asp?id=%7B44eb2b74-088d-4d83-a645-bcbdf23e1b82%7D [hereinafter Viancos, La Milionaria Agenda Eléctrica].
5. In Chile thermal power generation uses coal, natural gas, and oil, nearly all of which are imported. See Comisión Nacional de Energía, El Sector Eléctrico en Chile (1996) [hereinafter Comisión Nacional de Energía, El Sector Eléctrico].
6. The following environmental magazine cover story gives a flavor of the international debate: "Patagonia Under Siege: Will Chile's Booming, Energy-Hungry Economy Lay Waste to the Country's Last Untamed Frontier? A Global Parable."
7. See George Black, Patagonia Under Siege: Will Chile's Booming, Energy-Hungry Economy Lay Waste to the Country's Last Untamed Frontier? A Global Parable, ONEARTH, Fall 2006, at 15, available at http:// www.nrdc.org/OnEarth/ 06fal/patagonia.pdf. More recently the New York Times published an editorial, 'Tatagonia Without Dams," with similar rhetoric.
8. See Editorial, Patagonia Without Dams, N.Y. TIMES, Apr. 1, 2008, at A22, available at http://www.nytimes.com/2008/04/ 01/opinion/01tue3.html (the April Fool's Day date appears to be a coincidence).
9. See map infra Part IV.B. "Patagonia" is a term used loosely in Chile and Argentina. In general it refers to the southernmost regions of both countries that are sparsely populated and with a harsh climate; however, there is no official definition. In Argentina, Patagonia is often considered to be everything south of the Colorado River, in the Province of Neuquén (roughly 39 degrees south latitude). In Chile, Patagonia generally means the area south of the city of Puerto Montt in Region X, which marks the southern end of "mainland" Chile (roughly 42 degrees south latitude). Hence Chilean Patagonia consists of the country's two administrative regions that are farthest south, Regions XI and XII (also called the Regions of Aysén and Magallanes, respectively), as well as part of Region X. For historical background,
10. see HANS STEFFEN, PATAGONIA OCCIDENTAL (2009).
11. The Spanish company, ENDESA España, was recently bought by an Italian power company, ENEL, in 2007 with no apparent effect on its operations in Chile. See "ENEL, Acciona Acquire Endesa with $60 bn Bid," THE FINANCIAL EXPRESS, Oct. 5, 2007, available at http://www.financialexpress. com/printer/news/225195/.
12. Francisco Riestra, Hydrography of the Aysén Region, Address at the Pan-American Advanced Studies Institute (Jan. 2005);
13. Luis Court, La Hidroelectricidad en Chile, 143 Revista de Ingeniería Chilena, 1994, at 26 [hereinafter Court, La Hidroelectricidad en Chile];
14. Comisión Nacional de Energía, El Sector Energía en Chile (1989) [hereinafter Comisión Nacional de Energía, El Sector Energía I]. As discussed infra Part IV, Chilean engineers have recognized this potential for many decades, but until recently the region's great distance from the country's central electricity grid has made it too expensive to build any dams in the region.
15. See sources cited supra note 4.
16. See, e.g., Ecosistemas, Home Page, http://www.ecosistemas.cl (last visited July 13, 2009);
17. Patagonia Chilena iSin Represas!, Home Page, http://www. patagoniasinrepresas.cl (last visited July 13, 2009);
18. Aisén Reserva de Vida, http://www.aisenreservadevida.com/ (last visited July 13, 2009);
19. Coalición Ciudadana por Aisén Reserva de Vida, http:// aysenreservadevida.blogspot.com/ (last visited July 13, 2009). In 2008, a large coffee-table book with beautiful photographs was published in Chile by many of these activists.
20. See PATAGONIA CHILENA iSIN REPRESAS! (Patricio Rodrigo & Juan Pablo Orrego eds., 2008).
21. See World Bank, Water Resources Sector Strategy: Strategic Directions for World Bank Engagement (2004), at 17-18 [hereinafter World Bank, Strategic Directions]. For recent overviews of hydropower in South America and the global context,
22. see Luiz Barroso et al., Creating Harmony in South America, IEEE POWER & ENERGY MAGAZINE, July/Aug. 2006, at 32;
23. Hugh Rudnick et al., A Delicate Balance in South America, IEEE POWER & ENERGY MAGAZINE, July/Aug. 2008, 22 [hereinafter Rudnick et al., A Delicate Balance in South America].
24. PATRICK MCCULLY, SILENCED RIVERS: THE ECOLOGY AND POLITICS OF LARGE DAMS (1996) [hereinafter MCCULLY, SILENCED RIVERS];
25. WORLD COMMISSION ON DAMS, DAMS AND DEVELOPMENT: A NEW FRAMEWORK FOR DECISION-MAKING (2000), available at http://www. internationalrivers.org/en/ africa/dams-and-development-new-framework-decision-makers [hereinafter WORLD COMMISSION ON DAMS, DAMS AND DEVELOPMENT];
26. SANDRA POSTEL & BRIAN RICHTER, RIVERS FOR LIFE: MANAGING WATER FOR PEOPLE AND NATURE (2003) [hereinafter POSTEL & RICHTER, RIVERS FOR LIFE].
27. The water-energy nexus has begun to attract more policy analysis both internationally and within the United States. See, e.g., RONNIE COHEN ET AL., ENERGY DOWN THE DRAIN: THE HIDDEN COSTS OF CALIFORNIA WATER SUPPLY (2004);
28. UNITED NATIONS INDUST. DEV. ORG., Water and Energy, in 2ND UNITED NATIONS WORLD WATER DEV. REPORT 305 (2006).
29. There is a vast literature about neoliberalism and the Washington Consensus. See, e.g., PEDRO-PABLO KUCZYNSKI & JOHN WILLIAMSON EDS., AFTER THE WASHINGTON CONSENSUS: RESTARTING GROWTH AND REFORM IN LATIN AMERICA (2003).
30. John Besant-Jones, Reforming Power Markets in Developing Countries: What Have We Learned?, Energy and Mining Sector Board Discussion Paper 19 (2006) [hereinafter BesantJones, Reforming Power Markets].
31. See The Millennium Ecosystem Assessment, http://www.millenniumassessment. org/en/Index.aspx (last visited July 13, 2009) (noting many publications resulting from this massive international effort);
32. see also Frances Irwin & Janet Ranganathan, Restoring Nature's Capital: An Action Agenda to Sustain Ecosystem Services (2007). On freshwater ecosystem services in particular,
33. see Bruce Aylward et al., Freshwater Ecosystem Services, in 3 ECOSYSTEMS AND HUMAN WELL-BEING: POLICY RESPONSES 213 (2005) [hereinafter Aylward, Freshwater Ecosystem Services];
34. Kate Brauman et al., The Nature and Value of Ecosystem Services: An Overview Highlighting Hydrologic Services, 3 ANNUAL REVIEW OF ENVT. & RESOURCES 67 (2007).
35. See, e.g., James Salzman & J.B. Ruhl, Currencies and the Commodification of Environmental Law, 53 STAN. L. REV. 607 (2000).
36. For a political economic argument that relates the circulation of water to the circulation of value and power, see ERIK SWYNGEDOUW, SOCIAL POWER AND THE URBANIZATION OF WATER: FLOWS OF POWER (2004) [hereinafter SWYNGEDOUW, SOCIAL POWER].
37. The legal and economic complexities of treating water as energy have a long history. See, e.g., Carol Rose, Energy and Efficiency in the Realignment of Common Law Water Rights, in PROPERTY AND PERSUASION, 163-96 (1994) [hereinafter Rose, PROPERTY AND PERSUASION].
38. See infra Parts III, IV, V.
39. DAVID GILLILAN & THOMAS BROWN, INSTREAM FLOW PROTECTION: SEEKING A BALANCE IN WESTERN WATER USE 64-70 (1997).
40. See infra Parts IV, V.
41. See infra Parts IV, V.
42. See, e.g., CARL J. BAUER, SIREN SONG: CHILEAN WATER LAW AS A MODEL FOR INTERNATIONAL REFORM (2004) [hereinafter BAUER, SIREN SONG];
43. KEN CONCA, GOVERNING WATER: CONTENTIOUS TRANSNATIONAL POLITICS AND GLOBAL INSTITUTION BUILDING (2006);
44. World Bank, Strategic Directions, supra note 10;
45. POSTEL & RICHTER, RIVERS FOR LIFE, supra note 11.
46. CARL J. BAUER, AGAINST THE CURRENT: PRIVATIZATION, WATER MARKETS, AND THE STATE IN CHILE (1998) [hereinafter BAUER, AGAINST THE CURRENT];
47. Carl J. Bauer, Slippery Property Rights: Multiple Water Uses and the Neoliberal Model in Chile, 1981-1995, 38 NAT. RESOURCES J. 109 (1998) [hereinafter Bauer, Slippery Property Rights].
48. PHILIP RAPHALS, RESTRUCTURED RIVERS: HYDROPOWER IN THE ERA OF COMPETITIVE MARKETS (2001).
49. BAUER, AGAINST THE CURRENT, supra note 24, at 79-110;
50. Bauer, Slippery Property Rights, supra note 24, at 109;
51. BAUER, SIREN SONG, supra note 23.
52. BAUER, AGAINST THE CURRENT, supra note 24, at 106.
53. BAUER, AGAINST THE CURRENT, supra note 24, at 1-9;
54. BAUER, SIREN SONG, supra note 23.
55. See sources cited supra note 26.
56. See BAUER, SIREN SONG, supra note 23, at 61-62;
57. Manuel Prieto, El Modelo Chileno de Gestión Hidroeléctrica: Una Approximación desde la Sustenabilidad Profunda (Nov. 2007) (unpublished M.A. thesis, Pontificia Universidad Católica de Chile) (on file with Lo Contador Library, Pontificia Universidad Católica de Chile) [hereinafter Prieto, El Modelo Chileno];
58. Manuel Prieto & Carl Bauer, Hydroelectric Power Generation in Chile: An Institutional Critique of the Neutrality of Market Mechanisms (unpublished paper) [hereinafter Prieto & Bauer, Hydroelectric Power];
59. David Tecklin et al., Making Environmental Law for the Market: The Emergence, Character, and Dilemmas of Chile's Environmental Regime (unpublished paper) [hereinafter Tecklin et al., Making Environmental Law].
60. I have discussed my theoretical framework and methods in somewhat more detail in BAUER, AGAINST THE CURRENT, supra note 24, at 6-9;
61. BAUER, SIREN SONG, supra note 23, at 8-16.
62. Within geography there have been a variety of approaches to studying water resource management, along the spectrum from bio-physical sciences to social sciences and humanities. Some important examples focused on water policies and political economy include Karen Bakker, Neoliberalizing Nature? Market Environmentalism in Water Supply in England and Wales, 95(3) ANNALS OF THE ASSOCIATION OF AMERICAN GEOGRAPHY 542 (2005) [hereinafter Bakker, Neoliberalizing Nature?];
63. KAREN BARKER, AN UNCOOPERATIVE COMMODITY: PRIVATIZING WATER IN ENGLAND AND WALES (2003) [hereinafter BARKER, AN UNCOOPERATIVE COMMODITY];
64. SWYNGEDOUW, SOCIAL POWER, supra note 17;
65. James L. Wescoat Jr., Water Policy and Cultural Exchange: Transferring Lessons from Around the World to the Western United States, in IN SEARCH OF SUSTAINABLE WATER MANAGEMENT: INTERNATIONAL LESSONS FOR THE AMERICAN WEST AND BEYOND 1 (2005);
66. Gilbert White, A Perspective of River Basin Development, 22 LAW & CONTEMP. PROBS. 157 (1957).
67. See The Law and Society Association, http://www.lawandsodety.org (last visited July 14, 2009).
68. See also sources cited in BAUER, SIREN SONG, supra note 23, at 138 n.17.
69. See infra Parts III, IV. I do not discuss the 1994 Environmental Law in this article because it is secondary to the other laws, nor do I discuss the 1980 Constitution, which I have analyzed in previous publications.
70. BAUER, AGAINST THE CURRENT, supra note 24, at 11-31;
71. Carl J. Bauer, Derecho y Economía en la Constitución de 1980, 2(1) PERSPECTIVAS EN POLÍTICA, ECONOMÍA Y GESTIÓN 23 (1998) [hereinafter Bauer, Derecho y Economía].
72. There are of course many different schools of thought in political economy, but it is not necessary to sort them all out here.
73. See BAUER, SIREN SONG, supra note 23, at 138 n.11.
74. PROPERTY: MAINSTREAM AND CRITICAL POSITIONS 3 (1978).
75. There is, of course, a vast literature about property rights. I have cited and discussed some of it.
76. See BAUER, AGAINST THE CURRENT, supra note 24;
77. BAUER, SIREN SONG, supra note 23.
78. See also Rose, PROPERTY AND PERSUASION, supra note 18;
79. PROPERTY: MAINSTREAM AND CRITICAL POSITIONS, supra note 37.
80. See discussion infra Part V.
81. See BAUER, AGAINST THE CURRENT, supra note 24, at 3-5, and citations therein.
82. BAUER, AGAINST THE CURRENT, supra note 24, at 11-31.
83. see BAUER, AGAINST THE CURRENT, supra note 24, at 11-31;
84. Bauer, Derecho y Economía, supra note 34. The four Presidents of the Concertarían have been Patricio Aylwin (1990-94), Eduardo Frei Ruiz-Tagle (son of former President Eduardo Frei Montalva) (1994-2000), Ricardo Lagos (2000-06), and Michelle Bachelet (2006-10).
85. BAUER, AGAINST THE CURRENT, supra note 24;
86. BAUER, SIREN SONG, supra note 23.
87. See map infra Part IV.B.
88. The Water Code was dictated as Decree with Force of Law 1, 122, on October 29, 1981. Much of this Part (III) is adapted from previous works that have more complete references, extended discussions of the Chilean Water Code, and its international significance.
89. See BAUER, AGAINST THE CURRENT, supra note 24, at 33-50;
90. BAUER, SIREN SONG, supra note 23, at 31-50;
91. Carl J. Bauer, In the Image of the Market: The Chilean Model of Water Resources Management, 3(2) INT'L J. WATER 146, 146-65 (2005) [hereinafter Bauer, In the Image of the Market]. For studies of Chilean water markets that do not focus on hydropower or river basin management,
92. see Carl Bauer, Bringing Water Markets Down to Earth: The Political Economy of Water Rights in Chile, 1976-1995, 25 WORLD DEV. 639 (1997)
93. [hereinafter Bauer, Bringing Water Markets Down to Earth], and Carl Bauer, Results of Chilean Water Markets: Empirical Research since 1990, 40 WATER RESOURCES RES. 9 (2004).
94. PHILLIP BALL, LIFE'S MATRIX: A BIOGRAPHY OF WATER 27 (2001).
95. See, e.g., Bakker, Neoliberalizing Nature?,
96. supra note 32; Michael Hanemann, The Economic Conception of Water, in CRISIS: MYTH OR REALITY? (2006);
97. Joseph Sax, The Constitution, Property Rights, and the Future of Water Law, 61 U. COLO. L. REV. 257 (2000).
98. BAUER, AGAINST THE CURRENT, supra note 24, at 33-50;
99. BAUER, SIREN SONG, supra note 23, at 31-50.
100. The legislative reform in 2005 changed relatively little, as discussed below. See infra Part III.C.
101. BAUER, AGAINST THE CURRENT, supra note 24, at 33-50;
102. BAUER, SIREN SONG, supra note 23, at 31-50.
103. BAUER, AGAINST THE CURRENT, supra note 24, at 11-31;
104. Bauer, Derecho y Economía, supra note 34;
105. BAUER, SIREN SONG, supra note 23, at 35, 36.
106. Some of these provisions were modified in 2005, although the changes apply only to new rights granted after the recent reform took effect. See infra Part III.C.
107. Under exceptional circumstances, the President of Chile can intervene to make such a choice. See generally Bauer, Bringing Water Markets Down to Earth, supra note 45.
108. BAUER, AGAINST THE CURRENT, supra note 24, at 33-50;
109. BAUER, SIREN SONG, supra note 23, at 31-50.
110. To my knowledge this has never happened.
111. The one exception was the creation of non-consumptive water rights, discussed below. See infra Part III. B.
112. BAUER, AGAINST THE CURRENT, supra note 24, at 79-123;
113. Bauer, Slippery Property Rights, supra note 24;
114. BAUER, SIREN SONG, supra note 23, at 96-117.
115. BAUER, AGAINST THE CURRENT, supra note 24, at 33-40;
116. BAUER, SIREN SONG, supra note 23, at 31-50.
117. See BAUER, SIREN SONG, supra note 23, at 51-73;
118. Bauer, In the Image of the Market, supra note 45.
119. For more detailed legal analysis of non-consumptive rights, see BAUER, AGAINST THE CURRENT, supra note 24;
120. Bauer, Slippery Property Rights, supra note 24;
121. BAUER, SIREN SONG, supra note 23.
122. The legal term "consumptive" was not used before 1981 because all water rights were assumed to be consumptive. This reflects the historical predominance of agriculture in Chilean water use. See sources cited supra note 59.
123. See infra Part V.B.
124. See infra Part IV.
125. BAUER, SIREN SONG, supra note 23, at 51-73;
126. Bauer, In the Image of the Market, supra note 45.
127. See discussion infra Part V.
128. BAUER, AGAINST THE CURRENT, supra note 24, at 79-123;
129. Bauer, Slippery Property Rights, supra note 24;
130. BAUER, SIREN SONG, supra note 23, at 96-117.
131. See sources cited supra 59;
132. see also the discussion infra Part IV;
133. Carl J. Bauer, The Experience of Chilean Water Markets (2008) (presentation at Expo Zaragoza, Water Tribune, Thematic Week on Economics and Financing: The Role of Market Instruments in Integrated Water Management) [hereinafter Bauer, The Experience of Chilean Water Markets].
134. See Orrego v. Empresa Eléctrica Pangue (Corte Suprema, May 8, 1993) (Recurso de Protección (Chile)).
135. This case is discussed in detail in BAUER, AGAINST THE CURRENT, supra note 24, at 100-10;
136. Bauer, Slippery Property Rights, supra note 24.
137. Prieto, El Modelo Chileno, supra note 30.
138. Ley 20, 017 (2005) (approving modifications to the Código de Aguas) (Chile).
139. For a detailed analysis of the politics of the Chilean reform, see BAUER, SIREN SONG, supra note 23, at 51-73, 118-31;
140. Bauer, In the Image of the Market, supra note 45.
141. Bauer, The Experience of Chilean Water Markets, supra note 67.
142. BAUER, SIREN SONG, supra note 23, at 51-73, 118-31;
143. Bauer, The Experience of Chilean Water Markets, supra note 67.
144. Bauer, The Experience of Chilean Water Markets, supra note 67.
145. For a more positive view of the 2005 reform by the former head of the DGA who pushed it through,
146. see Humberto Peña, Taking It One Step at a Time: Chile's Sequential, Adaptive Approach to Achieving the Three Es, in INTEGRATED WATER RESOURCES MANAGEMENT IN PRACTICE 153-68 (2009) [hereinafter Peña, Taking It One Step at a Time].
147. Bauer, The Experience of Chilean Water Markets, supra note 67.
148. See infra Part V.F.
149. For an example of the mysterious, awe-inspiring nature of electricity as it appeared in the early decades of its emergence as a modem technology, see the quotation from Washington's Union Station, supra Part I.
150. For an overview of electricity technology and regulation
151. , see Timothy Brennan et al., A Shock to the System: Restructuring America's Electricity Industry, in RESOURCES FOR THE FUTURE (1996) [hereinafter Brennan et al., A Shock to the System], For more historical accounts,
152. see DAVID BODANIS, ELECTRIC UNIVERSE: THE SHOCKING TRUE STORY OF ELECTRICITY (2005);
153. Brian Bowers, Electricity, in AN ENCYCLOPEDIA OF THE HISTORY OF TECHNOLOGY 350-87 (1990);
154. Louis HUNTER & LYNWOOD BRYANT, 3 THE TRANSMISSION OF POWER (1991).
155. In this section I draw on several publications by Chilean energy economists and engineers: Carlos Díaz et al., La Crisis Eléctrica de 1998-1999: Causas, Consecuencias y Lecciones, ESTUDIOS PÚBLICOS 149-92 (Primavera 2000) [hereinafter Díaz et al., La Crisis Eléctrica];
156. Ronald Fischer & Pablo Serra, Regulating the Electricity Sector in Latin America, 1(1) ECONOMÍA 155 (2000) [hereinafter Fischer & Serra, Regulating the Electricity Sector];
157. RICARDO PAREDES & JOSÉ MANUEL SAPAG, FORTALEZAS Y DEBILIDADES DEL MARCO RECULATORIO ELÉCTRICO CHILENO: PROPUESTAS PARA UN CAMBIO (2001) [hereinafter PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES]. For more on international trends in electricity regulation,
158. see Besant-Jones, Reforming Power Markets, supra note 14;
159. Brennan et al., A Shock to the System, supra note 79;
160. Rudnick et al., South American Reform Lessons, IEEE Power & Energy Magazine, July/Aug. 2005, at 49 [hereinafter Rudnick et al., South American Reform Lessons].
161. Rudnick et al., A Delicate Balance in South America, supra note 10;
162. Hugh Rudnick & Juan M. Zolezzi, Electric Sector Deregulation and Restructuring in Latin America: Lessons to be Learnt and Possible Ways Forward, 148(2) IEE PROCEEDINGS-GENERATION, TRANSMISSION, AND DISTRIBUTION 180-84 (2001) [hereinafter Rudnick & Zolezzi, Electric Sector Deregulation]. Some analysts consider the commercialization of power to be a fourth subsector, distinct from distribution. In this article, however, and reflecting the practice in Chile, I include commercialization in the distribution subsector.
163. See, e.g., Fischer & Serra, Regulating the Electricity Sector, supra note 80;
164. PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80;
165. Rudnick et al., A Delicate Balance in South America, supra note 10.
166. See infra Part V.F.
167. In the case of melting glaciers, these water supplies depend on snowfall in previous years or centuries.
168. See infra Part V.A.
169. Whether or not hydropower operators pay some price for their use of water depends on the relevant law and policy; it is not inherent in the technology. In Chile they pay nothing. See supra Part III.
170. See, e.g., PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80.
171. See, e.g., Díaz et al., La Crisis Eléctrica, supra note 80;
172. Fischer & Serra, Regulating the Electricity Sector, supra note 80;
173. PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80;
174. Rudnick et al., A Delicate Balance in South America, supra note 10.
175. See supra note 11.
176. Interview with José Manuel Sapag, Consultant and Research Assoc., Univ. of Chile, Santiago, Chile (Mar. 2, 2003).
177. In the 1930s the country's electricity supplies were limited and new power development had stalled. The infrastructure consisted of small and isolated local systems centered on key cities and industries. The electricity sector was dominated by private companies, some of them were owned, in part, by foreign capital. In 1940, total national capacity was 484 megawatts (MW) of which hydropower produced 32 percent and thermal power the remaining 68 percent. Public service accounted for 38 percent of the total and 62 percent was produced by industries for their own use. The urban areas of Santiago, Valparaiso, and Aconcagua (all in central Chile) accounted for 75 percent of the public service. See Comisión Nacional de Energía, El Sector Energía en Chile 70 (1993) [hereinafter Comisión Nacional de Energía, El Sector Energía II]; Instituto de Ingenieros de Chile, Política Eléctrica 29-30 (1988) [hereinafter Instituto de Ingenieros de Chile, Política Eléctrica].
178. ENDESA was a part of CORFO, the National Development Corporation, which the government established in 1939 after a major earthquake in central Chile caused severe damage. CORFO played a major role in stimulating economic development in Chile for decades afterwards.
179. The following summary of the national plan is synthesized from Comisión Nacional de Energía, El Sector Energía I, supra note 7; Comisión Nacional de Energía, El Sector Energía II, supra note 90;
180. Court, La Hidroelectricidad en Chile, supra note 7;
181. Instituto de Ingenieros de Chile, Política Eléctrica, supra note 90;
182. Revista de Ingenieros, ENDESA: 1943-1993, 132 REVISTA DEL COLEGIO DE INGENIEROS DE CHILE 9 (1993) [hereinafter Revista de Ingenieros, ENDESA: 1943-1993].
183. These early projects were essentially run-of-the-river power plants. The first dam to be completed was Pilmaiquén in 1944, in Region X. Its generating capacity was small but its location showed that ENDESA was paying attention to southern Chile from the beginning.
184. In the upper parts of each of these two river basins, ENDESA modified natural mountain lakes so that they worked as reservoirs. Both Lake Maule and Lake Laja have been managed for the dual purposes of hydropower and irrigation under rules of operation and water allocation that date from 1947 and 1958, respectively, and are still in force today
185. . See BAUER, AGAINST THE CURRENT, supra note 24;
186. Bauer, Slippery Property Rights, supra note 24;
187. BAUER, SIREN SONG, supra note 23.
188. See Comisión Nacional de Energía, El Sector Energía I, supra note 7.
189. See Comisión Nacional de Energía, El Sector Energía II, supra note 90, at 72;
190. Instituto de Ingenieros de Chile, Política Eléctrica, supra note 90, at 30;
191. Revista de Ingenieros, ENDESA: 1943-1993, supra note 92.
192. By 1962, for example, the SIC had 12 hydro plants with a total capacity of 549 MW, compared to two thermal plants with a total capacity of 155 MW. See Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 98-99 tbls.4-6 & 4-7.
193. In Chile a "large" power plant, whether hydro or thermal, means about 300-500 MW, which by international standards would probably be considered medium-sized.
194. The first of these projects was Rapel Dam on the Rapel River in Region VI, which was finished in 1968-70 and had a capacity of 350 MW. Next were El Toro and Antuco dams in the Laja basin, which were built at and just below the outlet of Lake Laja. They were finished in 1973 and 1981, respectively, and added 400 MW and 300 MW. After that came the adjoining Colbún and Machicura dams on the Maule River, which were finished in 1985 and totaled 490 MW (of which 400 MW were from Colbún Dam). The Colbún reservoir was required to store some water seasonally for local irrigators, according to a month-by-month calendar of guaranteed releases, but hydropower was Colbún's major purpose.
195. See BAUER, AGAINST THE CURRENT, supra note 24;
196. Bauer, Slippery Property Rights, supra note 24. Machicura is a smaller reservoir located just below Colbún, which helps to regulate the flows released downstream.
197. Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 98-99.
198. Chilectra had been a private utility located mainly in central Chile but was taken over by the left-wing Chilean government in 1970. Like many such nationalized enterprises, Chilectra remained in government hands after the military took power in 1973.
199. In drought years the proportions shifted to about 50/50, as the lack of water forced an increase in thermal power generation. Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 98-99.
200. Nearly all of the SIC's production went to public service. Industries produced about 10 percent of the SIC's total for their own use in equal shares of hydro and thermal. Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 98-99.
201. The SING differs from the SIC in several fundamental ways. First, the SING is much smaller, producing and consuming about 20 percent of the total of the SIC. Second, the mining industry is by far the largest consumer of electricity in northern Chile, and most of the mining companies have generators̀ to produce their own power. The population in northern Chile is relatively small. Third, generation depends almost entirely on thermal power plants rather than hydropower. Northern Chile is a desert and rivers are too small to offer much hydropower potential. In 1988 the SING's total capacity was 596 MW. Mining companies had 500 MW of this (84 percent)-all of it thermal power. See Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 101-03. In contrast, the SIC's capacity at the time was 3, 221 MW, nearly 80 percent of which was produced by hydropower. Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 98-99. In 1992 the SING had expanded to 876 MW of installed capacity, with thermal power accounting for all of the expansion. The SIC's capacity, meanwhile, had grown to 4, 123 MW, nearly 75 percent of which was hydropower. See Comisión Nacional de Energía, El Sector Energía II, supra note 90, at 58 tbls.4.14, 4.15.
202. I will return to privatization and the political economic context in Part IV.C.
203. See Comisión Nacional de Energía, El Sector Energía I, supra note 7.
204. See Centro de Despacho Económico de Carga-Sistema Interconectado Central, Centrales del SIC, http://www.cdec-sic.cl/centrales (last visited Mar. 3, 2006). See also discussion infra Part IV.C.
205. The Bio Bio River was an obvious target for hydropower development; it is the longest river in Chile and has the country's second-largest hydropower potential, surpassed only by the Baker River in Patagonia. ENDESA had studied the Bio Bio for decades as a state enterprise before starting construction as a private company in the early 1990s.
206. See BAUER, AGAINST THE CURRENT, supra note 24;
207. Court, La Hidroelectricidad en Chile, supra note 7;
208. ENDESA, RECURSOS HIDROELÉCTRICOS DE LA CUENCA DEL Bio-Bio (1989);
209. Rodolfo Von Bennewitz, Recursos Hidroeléctricos de la Cuenca del Bío Bío, in 18 LA REGION DEL Bio Bio, COLECCIÓN NOSTRA 83-130 (1990). The Frei government pushed for hydropower development in Patagonia in 1995-96;
210. see also Héctor Vera, Disputa Austral, Qué Pasa, June 7, 1999, available at http://www.quepasa.cl.
211. Thermal capacity increased from 743 MW in 1989 to 2, 289 MW in 1999, with 72 percent of the increase due to gas. Centro de Despacho Económico de Carga Sistema Interconectado Central, Centrales del SIC, http://www.cdec-sic.cl/ centrales (last visited Mar. 3, 2006) (compiled by author).
212. See infra Part V.
213. The two southernmost regions in Chile are too far away to be connected to the SIC. Regions XI and XII each have small, separate electric systems. Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 103; Comisión Nacional de Energía, El Sector Energía II, supra note 90, at 59.
214. See infra Part V.
215. Decreto con Fuerza de Ley No. 1 [DFL 1] (1982) (Chile).
216. In other words, this description applies to the situation from 1990 on, unless otherwise specified.
217. See supra Part III. A. The 2005 reform slightly reduced the Water Code's laissezfaire characteristics. See supra Part III. C.
218. According to Hernán Büchi, former Finance Minister in the military government: Here Chile was a pioneer ... The challenge consisted of generating a system of prices and organization in the electric sector whose price regime would function 'as if' there were competition. It was an exclusively intellectual creative labor, whose core was used later in the systems of telecommunications and drinking water supply.
219. HERNÁN BÜCHI, LA TRANSFORMACIÓN ECONÓMICA DE CHILE: DEL ESTATISMO A LA LIBERTAD ECONÓMICA 79 (1993)
220. (author's translation). See Comisión Nacional de Energía & Departamento de Ingeniería Industrial, Institucionalidad Regulatoria en el Sector Energía (1996);
221. Fischer & Serra, Regulating the Electricity Sector, supra note 80;
222. Rudnick et al., South American Reform Lessons, supra note 80;
223. Rudnick & Zolezzi, Electric Sector Deregulation, supra note 80 (comparing the Chilean model with later generations of electricity reform in other countries, especially in Latin America).
224. See also Brennan et al., A Shock to the System, supra note 79 (providing an overview of electricity restructuring that focuses on the United States but applies more broadly);
225. Besant-Jones, Reforming Power Markets, supra note 14 (for a World Bank perspective).
226. See BAUER, SIREN SONG, supra note 23, at 10-30, 131-36.
227. Some examples are discussed infra Part V.
228. I will generally refer to the "electricity law," although many of the technical details have been defined in subsequent regulations rather than in the legislation itself. This section is synthesized from multiple sources.
229. See La Regulación del Sector Eléctrico: La Experiencia Chilena, in DESPÚES DE LAS PRIVATIZACIONES: HACIA EL ESTADO REGULADOR 281 (1992) [hereinafter Blanlot, La Regulación del Sector Eléctrico];
230. Comisión Nacional de Energía, El Sector Energía I, supra note 7;
231. Díaz et al., La Crisis Eléctrica, supra note 80;
232. Ronald Fischer & Alexander Galetovic, Regulatory Governance and Chile's 1998-1999 Electricity Shortage (World Bank Policy Research, Working Paper No. 2704, 2001) [hereinafter Fischer & Galetovic, Regulatory Governance];
233. Fischer & Serra, Regulating the Electricity Sector, supra note 80;
234. PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80;
235. ALEJANDRO VERGARA, DERECHO ELÉCTRICO (2004) [hereinafter VERGARA, DERECHO ELÉCTRICO]. In addition to these references, I rely here on interviews in recent years with a half-dozen prominent Chilean energy experts, including academics, government advisors and officials, and private consultants.
236. See supra Part IV.A. Cf. sources cited supra note 119.
237. For example, if the government wants to help poor people with their electricity bills, it should transfer funds to pay the bills at the going rate, rather than lowering prices. This is the policy that Chile has followed for drinking water supply.
238. Alejandro Vergara, a Chilean expert on water and electricity law, has disagreed with my statement that the Water Code is more laissez-faire than the Electric Law. He thinks it is the reverse because decision-making in the electricity sector depends on private initiative and capital, and cannot be ordered by government regulators: "The hand of state authority is more distant in the electric sector than in water." A. Vergara, comments at author's lecture, Diego Portales Univ. Law School, Santiago, Chile July 20, 2009). His point is well taken, but I think he is underestimating the political nature of the basic legal rules of the game, particularly the fact that regulation determines prices much more than is the case for water rights.
239. In 1982 this approach was an international innovation. Nearly all other countries operated and regulated the electricity sector as a vertically integrated system, as was the case with ENDESA. See sources cited supra note 113.
240. See, e.g., Díaz et al., La Crisis Eléctrica, supra note 80;
241. Fischer & Serra, Regulating the Electricity Sector, supra note 80;
242. PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80;
243. Rudnick et al., A Delicate Balance in South America, supra note 10. See also sources cited supra note 119.
244. The power pool is a crucial part of the system, intimately tied to the spot market, and I discuss them in more detail in Part IV.C.1.
245. The CDEC was created by regulations in 1985 in order to implement this aspect of the 1982 legislation.
246. See Hugh Rudnick, Un Nuevo Operador Independiente de los Mercados Eléctricos Chilenos, 101 ESTUDIOS PUBLICOS 1 (2006). The websites of all three organizations are useful as well.
247. Node prices are much less important in the SING because most power consumption in the SING is by large clients, hence unregulated, rather than the public. See sources cited supra note 107.
248. See, e.g., Díaz et al., La Crisis Eléctrica, supra note 80;
249. Fischer & Serra, Regulating the Electricity Sector, supra note 80;
250. PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80;
251. Rudnick et al., A Delicate Balance in South America, supra note 10.
252. See also sources cited supra note 119.
253. This is very similar to the DGA in the field of water rights, as discussed supra Part III.
254. See sources cited supra note 128. See also sources cited supra note 119.
255. See supra text accompanying note 119.
256. See sources cited supra note 128.
257. See sources cited supra note 80;
258. Rudnick et al., A Delicate Balance in South America, supra note 10.
259. See also sources cited supra note 119.
260. See supra text accompanying note 85.
261. See supra note 133.
262. See supra text accompanying notes 127, 128 (explaining how the CNE determines node prices).
263. Díaz et al., La Crisis Eléctrica, supra note 80, at 155.
264. Id.; PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80. I return to these issues of regulatory governance infra Part V.
265. See supra note 104 and accompanying text.
266. For more technical explanations of this model, see Comisión Nacional de Energía, El Sector Energía I, supra note 7, at 368-72;
267. Díaz et al., La Crisis Eléctrica, supra note 80, at 157-61.
268. For more background on Lake Laja, see BAUER, AGAINST THE CURRENT, supra note 24;
269. Bauer, Slippery Property Rights, supra note 24.
270. In both cases these agreements are decades older than the current water and electricity laws, but they have been grandfathered in. See BAUER, AGAINST THE CURRENT, supra note 24.
271. Interviews with Eduardo Saavedra, Universidad Alberto Hurtado, in Santiago, Chile July 2003).
272. See supra Part III.
273. I return to this argument in the Conclusion, infra Part VI.
274. For more detailed accounts of the process of electricity privatization,
275. see Eduardo Bitrán & Raúl Sáez, Privatization and Regulation in Chile, in THE CHILEAN ECONOMY: POLICY LESSONS AND CHALLENGES (1994) [hereinafter Bitrán & Sáez, Privatization and Regulation in Chile];
276. Blanlot, La Regulación del Sector Eléctrico, supra note 119;
277. Comisión Nacional de Energía, El Sector Energía II, supra note 90, at 74-76;
278. DOMINIQUE HACHETTE & ROLF LÜDERS, LA PRIVATIZACIÓN EN CHILE 216-33 (1992);
279. CARLOS HUNEEUS, EL REGIMEN DE PINOCHET 437-98 (2000);
280. Revista de Ingenieros, ENDESA: 1943-1993, supra note 92.
281. See also HUGO FAZIO, MAPA ACTUAL DE LA EXTREMA RIQUEZA EN CHILE (1997) for a more critical view from the left.
282. The new owners included private investors, institutional investors (that is, Chile's privatized pension funds), groups of ENDESA's employees, and members of the armed forces. Despite the diversity of shareholders, the new companies were controlled by a small group of investors by means of rather intricate arrangements of stock ownership.
283. See Bitrán & Sáez, Privatization and Regulation in Chile, supra note 145;
284. Blanlot, La Regulación del Sector Eléctrico, supra note 119;
285. Comisión Nacional de Energía, El Sector Energía II, supra note 90;
286. HACHETTE & LÜDERS, supra note 145; HUNEEUS, supra note 145; FAZIO, supra note 145.
287. ENDESA owned the three dams that were supplied by Lake Laja, which had more total generation capacity than Colbún-Machicura, as well as much greater reservoir storage. Supra note 94 and accompanying text. In addition, in 1990, ENDESA was building Pehuenche Dam upstream from the Colbún dam, and would soon start building Pangue Dam on the Bio Bio. Supra note 104 and accompanying text.
288. I will use Colbún to refer to the company, and not the Colbún and Machicura dams, throughout the rest of the article.
289. The Concertación government eventually sold its majority stake in Colbún later in the 1990s.
290. Chilgener was renamed Gener later in the 1990s and then renamed AES-Gener after the U.S. utility AES acquired a major stake.
291. The data for the SIC's installed capacity refer only to public service and do not include industry's power generation for its own consumption. In the SIC, however, public service accounts for 90 percent of power consumption. Comisión Nacional de Energía, El Sector Energia I, supra note 7;
292. Comisión Nacional de Energía, El Sector Eléctrico, supra note 3.
293. See Fiscalía Nacional Economia, http://www.fne.cl/?content= antimonopolio (last visited Apr. 28, 2010).
294. See supra Part I.
295. See Bitrán & Sáez, Privatization and Regulation in Chile, supra note 145;
296. Blanlot, La Regulación del Sector Eléctrico, supra note 119;
297. Comisión Nacional de Energía, El Sector Energía II, supra note 90;
298. HACHETTE & LÜDERS, supra note 145;
299. HUNEEUS, supra note 145;
300. FAZIO, supra note 145.
301. See supra Part II.A.
302. Revista de Ingenieros, ENDESA: 1943-1993, supra note 92.
303. See Blanlot, La Regulación del Sector Eléctrico, supra note 119;
304. Comisión Nacional de Energía, El Sector Energía II, supra note 90.
305. See Comisión Nacional de Energía, El Sector Energía I, supra note 7.
306. Interview with Alejandro Jadresic, El Racionamiento Era el Último Recurso, EL MERCURIO, June 17, 1997.
307. Argentine energy companies would have preferred to keep selling their gas to Chile at international market prices-three times the price in Argentina-but they could export only the amounts that the government allowed.
308. See, e.g., Instituto de Ingenieros de Chile, Política Eléctrica, supra note 90, at 48.
309. See supra Parts III.A and III.B;
310. BAUER, AGAINST THE CURRENT, supra note 24;
311. Bauer, Slippery Property Rights, supra note 24;
312. BAUER, SIREN SONG, supra note 23.
313. See supra Part III.C.
314. See Hugo Altomonte, Síntesis del Estudio de Caso sobre Chile, in PROYECTO OLADE/ CEPAL/GTZ: ENERGÍA Y DESARROLLO EN AMÉRICA LATINA Y EL CARIBE (1996);
315. Blanlot, La Regulación del Sector Eléctrico, supra note 119;
316. Bitrán & Sáez, Privatization and Regulation in Chile, supra note 145;
317. Comisión Nacional de Energía, El Sector Energía II, supra note 90.
318. Recall that node prices went down temporarily throughout the SIC each time a new hydropower project began operation because it lowered the system's overall marginal costs. See supra Part IV.C.
319. See supra note 164.
320. BAUER, SIREN SONG, supra note 23, at 51-73.
321. Id. at 64.
322. See supra Part III.C;
323. BAUER, SIREN SONG, supra note 23;
324. Bauer, The Experience of Chilean Water Markets, supra note 67.
325. See infra note 184.
326. Law no. 19, 940 (Mar. 3, 2004). See also sources cited supra note 186, 188.
327. Law no. 20, 018 (May 19, 2005). See also sources cited supra note 186, 188.
328. See infra Part V.D.
329. In disputes with the government, the power companies' strongest leverage has often been to delay (or threaten to delay) new investments. See supra Part IV.C.
330. For example, the government managed to pass several changes to the Electric Law in June 1999 (fairly early in the debate), including the so-called "Article 99 bis" ("bis" refers to a modification added to a previous legal rule). The arrival of winter rains was finally ending the drought but the crisis atmosphere still dominated political debate. Article 99 bis referred to the required level of security of power supplies, in relation to hydrologic risk and uncertainty. The military government had added the original Article 99 bis in February 1990 (just before leaving office) as a result of an earlier drought in 1989. That 1990 amendment required generation companies to compensate their clients for any power shortages that occurred within the range of hydrological conditions that the CNE used to calculate node prices; the corollary was that generators had no obligation to compensate clients when conditions were more extreme. The drought in 1998-99 was so severe that it fell outside that established range of conditions, which relieved the generators of liability. The June 1999 reform responded by shifting the burden of liability onto the generators, obligating them to compensate clients for shortages no matter what, with no exceptions. The government's intention was to force the power companies to increase their generation capacity and reserve supplies. The wisdom of Article 99 bis was sharply criticized by many economists (and not only by the government's opponents) because of its perverse incentives for private investment. Many power companies were reluctant to invest in additional generators for fear of being held financially responsible for events outside their control.
331. See, e.g., PAREDES & SAPAG, FORTALEZAS Y DEBILIDADES, supra note 80.
332. Many examples of these arguments can be found in presentations at the annual Conferences of Electricity Law and Policy (Jornadas Eléctricas) held at the Catholic University Law School in Santiago, several years following 2000. See also infra Part V.D.
333. The Spanish company had the same name and acronym as the Chilean company. In this article I use "ENDESA" to refer to ENDESA Chile, and "ENDESA España" for the Spanish company.
334. The Chilean managers, led by ENDESA's president José Yuraszcek, explained that the company had become so successful that it had outgrown the Chilean domestic market, but to undertake a new round of international expansion it needed much greater financial resources. The Spaniards, for their part, gained an entry point, a base of operations, and a strategic partnership for their expansion throughout Latin America. The deal would have paid the Chilean managers very well and they would have continued to play a leadership role in the new multinational enterprise. In Chile the initial public reactions were positive and ENDESA's managers were congratulated for having made the "deal of the century." Within a few weeks, however, as more details emerged, the deal was increasingly criticized for violating financial regulations, business ethics, or both. Soon it became known instead as the "scandal of the century," and Yuraszcek was forced to resign in October 1997.
335. See Franco Parisi & Guillermo Yanez, The Deal of the Century in Chile: Endesa España's Takeover of Enersis, 9 INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS 103 (2000).
336. Díaz et al., La Crisis Eléctrica, supra note 80.
337. Id.
338. Id.
339. Id. See also BAUER, AGAINST THE CURRENT, supra note 24, at 79-118 (detailing a similar episode in the early 1990s).
340. In January 2000, the outgoing administration of President Eduardo Frei briefly floated a proposal that would have introduced rules to restrict the concentrated ownership and vertical integration that characterized the electricity sector. See Nueva Ley Eléctrica Enfatiza Desconcentración de Propiedad, EL MERCURIO, Jan. 26, 2000, avaibble at http//www. elmercurio.cl. The incoming administration of President Ricardo Lagos, however, took office in March and named a new head of the CNE, Vivianne Blanlot, who then developed a new proposal for the Ley Larga.
341. Alejandro Faine, Gobierno Lanza Nueva Ley Eléctrica que Regulará los Próximos 20 Años del Sector, LA SEGUNDA, Sept. 13, 2000, available at http//www.lasegunda.cl.
342. A very similar process took place with the Water Code reform. See BAUER, SIREN SONG, supra note 23, at 51-73.
343. Vivianne Blanlot: La Batalla Continua en el Congreso, SIETE+7, July 11, 2003, at 12-13.
344. One illustration of this problem was the clash between the Minister of Economy and the head of the CNE. See supra note 186 and accompanying text. The Chilean press focused a lot of attention on the personal ties of these two people to Gener and ENDESA, respectively, and hence their alleged representation of either thermal or hydropower interests.
345. Carola Rojas, El Precio de la Seguridad, QUÉPASA, June 25, 2004.
346. See Rodríquez-Empresas Eléctricas: La Soterrada Guerra por las Tarifas, DIARIO ESTRATEGIA, Mar. 28, 2005, available at http://www.bcn.cl/ carpeta-temas/temas-portada. 2005-10-26.1398811570/archivos-prensa.2005-10-28. 6273151645/articulos-prensa.2005-1028.5990918217 (then follow the link to content) (last visited Feb. 9, 2010);
347. Mariano Cubillos et al., Congreso Aprueba Reforma Eléctrica que Incentiva Inversiones y Aumenta Precios, LA TERCERA, May 4, 2005, http://www.quepasa.cl/medio/articulo/0,0,3255-5676-129710671, 00.html (last visited July 14, 2009).
348. Viancos, Hidroeléctricas Retoman Fuerte Protagonismo, supra note 2;
349. Viancos, 23 Nuevos Proyectos Avivan Oferta Eléctrica, supra note 2;
350. Viancos, La Milionária Agenda Eléctrica, supra note 2.
351. See supra Part III.C.
352. See supra Part I. See also Valeria Ibarra, ENDESA Planea Construir Cinco Centrales en 15 Años por U.S. $2,800 Millones, LA TERCERA, June 26, 2004, at 33.
353. Supra note 9 and accompanying text. See also Ecologistas Preparan Ofensiva Contra Hidroeléctricas de Endesa en Aysén, LA TERCERA, Sept. 29, 2005;
354. Oriana Fernandez and Sebastian Vasquez, ONG Extranjeras Apoyan Campaña Contra Centrales de Endesa en XI Región, LA TERCERA, Oct. 6, 2005 (naming Carl Bauer as a foreign researcher supporting the campaign, based on the Chilean writers' mistaken assumption that Resources for the Future was an environmental advocacy group rather than a policy think-tank), available at http://www. icarito.cl/medio/articulo/0,0,3255-5666-163630605,00.hrml;
355. Francisca Skoknic and Pablo Gazzolo, Robert Kennedy: Apoyaré a Quienes Defienda los Ríos Chilenos, QUÉPASA, Oct. 2005.
356. Colbún's financial situation improved after the 1998-99 electricity crisis, during which it had been the biggest loser of Chile's three major electric utilities. By 2003, Colbún was considered the healthiest, if still the smallest, of the three; compared to ENDESA and Gener, it was the most evenly balanced between hydro and thermal power and its assets were all in Chile, somewhat insulated from the economic problems of neighboring countries. See Juan Pablo Rioseco, Viento a Favor de Colbún, QUÉPASA, Mar. 29, 2002, http:// www.quepasa.cl;
357. Solange Vega, El Ojo Eléctrico de los Matte, QUÉPASA, Apr. 11, 2003;
358. Alejandro Sáez Rojas, Los Destellos de Colbún, EL MERCURIO, Oct. 5, 2003, at B3, available at http:/ /diario.elmercurio.cl/detalle/index. asp?id={96b9ca9c-eble-460f-81a7-80b6c8951e7b};
359. Carola Rojas, Colbún: Objeto de Deseo, QUÉPASA, Feb. 20, 2004.
360. See Valeria Ibarra, Grupo Matte se Transforma en el Segundo Operador Eléctrico del País, LA TERCERA, Aug. 4, 2005, available at http://www.icarito.cl/medio/articulo/ 0,0,3255-5676-152186673,00.html (last visited July 14, 2009);
361. Sandra Rojas, Nuevo Gerente Reorganiza Colbún y Anuncia Inversiones por U.S. $800 Millones, LA TERCERA, Dec. 18, 2005, available at http://edelect.latercera.cl/medio/articulo/0,0,3255-5676-177567288,00.html (last visited July 14, 2009).
362. See Carla Alonso, El Factor Matte: La Alianza Colbún-ENDESA y las Cifras Alegres del Negocio Hidroeléctrico, LA NACIÓN, Apr. 17, 2006, http://www.mapuexpress.net/content/ publications/print.php?id=308;
363. ENDESA y Colbún Acuerdan Fórmula para Alianza en Proyecto Aysén, LA TERCERA, Apr. 27, 2006, available at http://www.icarito.cl/ medio/articulo/0,0,3255-5676-203218517,00.html (last visited July 14, 2009).
364. See Andrea Sierra, El Gobierno Está Consciente de que los Recursos en Aisén Van a Tener que Usarse, EL MERCURIO, Dec. 10, 2006 (interview with Public Works Minister Eduardo Bitrán), available at http://diario.elmercurio.cl/detalle/index.asp?id={fc4f7eb4f8ea-4623-8d5b- bf2988f4cd67};
365. CNE Defiende Plan Hidroeléctrico en Aisén, EL MERCURIO, Dec. 12, 2006. On the System for Environmental Impact Assessment, see sources cited supra note 30 and accompanying text.
366. José Miguel Jaque, Central Río Cuervo Entró a Sistema de Evaluación de Impacto Ambiental, LA NACIÓN, Jan. 3, 2007.
367. Gobierno de Nueva y Potente Señal para Construcción de Centrales Eléctricas en Aisén, EL MERCURIO, Mar. 20, 2007, available at http://diario.elmercurio.cl/detalle/index.asp?id={07a4a7ec-b1fc- 497c-9467-aeb68f9061bf}. See also supra text accompanying notes 129-131.
368. See Carla Alonso & Darío Zambra, Los Estudios que Doblaron la Mano a Endesa y los Matte, LA NACIÓN, Aug. 5, 2007;
369. José Miguel Jaque, El Costo no lo Va a Pagar el Medio Ambiente, LA NACIÓN, Aug. 10,2007, available at http://www.lanacion.cl/prontus- noticias/site/artic/20070809/pags/20070809215456.html.
370. See Tribunal de Defensa de la Libre Competencia, http://www.tdlc.cl/ Portal.Base/Web/VerContemdo.aspx?GUID-&ID=628 (last visited Apr. 28, 2010).
371. José Troncoso Ostornol, Tribunal de la Competencia Aprueba Alianza entre Endesa y Colbún con Cuatro Condiciones, EL MERCURIO, Oct. 20, 2007, available at http://diario.elmercurio.cl/detalle/index.asp?id={88236b91- c1b8-443f-8d44-cac6c0792977}.
372. See also Tribunal de Defensa de la Libre Competencia, Resolución No. 22/2007 (Oct. 19, 2007), available at http://www.tdlc.cl/ DocumentosMultiples/Resoluci%C3%B3n-22-2007.pdf.
373. See supra note 6.
374. See Antonio Valencia, Duros Informes Fiscales Contra Proyecto HidroAysén, LA NACIÓN, Oct. 9, 2008, available at http://www.lanacion.cl/prontus-noticias-v2/site/artic/ 20081008/pags/ 20081008215616.html;
375. D. Bustamante & V. Moya, DGA Recnaza Nuevos Derechos de Agua a Central de HidroAysén Pese a Respaldo Inicial de Gobierno, EL MERCURIO, NOV. 5, 2008, available at http://diario.ehnercurio.cl/detalle/index.asp?id= {d29401de-036e-462cbca8-03ecbd792976};
376. Lorena Rubio, Cortocircuito en HidroAysén, REVISTA QUÉPASA, available at http://www.quepasa.cl/medio/articulo/0,0,38039290-101111578- 372972504,00.html;
377. Darío Zambra, HidroAysén se Hunde, LA NACIÓN, NOV. 16, 2008, available at http://www. lanacion.cl/prontus-noticias-v2/site/artic/ 20081116/pags/20081116012421.html.
378. D. Bustamante & R. Barría, Corema Aprueba Obras para la Hidroeléctrica Alto Maipo y Opositores Irán a Tribunales, EL MERCURIO, Mar. 27, 2009, available at http://diario.elmercurio.cl/detalle/index. asp?id={f7e52948-c309-4930-99e4-09356b2c1d98}.
379. See SN Power, http://www.snpower.no/;
380. Pacific Hydro, http://www.pacific hydro.com.au/.
381. Personal Communication with Alejandro Vergara, July 2008 (on file with author);
382. see also COMISIÓN NACIONAL DE RIEGO, CENTRALES HIDROELÉCTRICAS ASOCIADAS A OBRAS DE RIEGO: MANUAL PARA ORGANIZACIONES DE USUARIOS DE AGUAS (2008), available at http:// www.cnr.gob.cl/opensite- 20061215151203.aspx.
383. See Beatriz Mitchell & Alejandra Carmona, Una Poderosa Carga Eléctrica: El Lobby para no Quedarse a Oscuras, LA NACIÓN, Oct. 26, 2008, available at http://www.lanacion.cl/ prontus-noticias-v2/site/artic/ 20081025/pags/20081025173530.html;
384. Paula Comandan, La Secreta Agenda Nuclear Chilena, Qué Pasa, Apr. 2008, available at http://www.icarito.cl/ medio/articulo/0,0,38039290-101111578- 349412866,00.html;
385. José Antonio Viera-Gallo, Minister of the Presidency, Remarks made to Chilean Chamber of Construction, La Energía: Debates y Decisiones (May 21, 2008).
386. See STEPHEN HALL ET AL., ¿SE NECESITAN REPRESAS EN LA PATAGONIA? UN ANÁLISIS DEL FUTURO ENERGÉTICO CHILENO (2009);
387. PROGRAMA DE ESTUDIOS E INVESTIGACIONES EN ENERGÍA DEL INSTITUTO DE ASUNTOS PÚBLICOS DE LA UNIVERSIDAD DE CHILE & NÚCLEO MILENIO DE ELECTRÓNICA INDUSTRIAL Y MECATRÓNICA, CENTRO DE INNOVACIÓN EN ENERGÍA DE LA UNIVERSIDAD TÉCNICA FEDERICO SANTA MARIA, APORTE POTENCIAL DE ENERGÍAS RENOVABLES No CONVENCIONALES Y EFICIENCIA ENERGÉTICA A LA MATRIZ ELÉCTRICA, 2008-25 (2008), available at http://www.eula.cl/doc/chile-new-renewables.pdf;
388. Beatriz Mitchell, La Sorpresa Renovable: Estudio de Energía Sustentable Deja Chica a la Ley, LA NACIÓN, Aug. 10, 2008, available at http://www.lnd.cl/prontus-noticias-v2/site/artic/20080809/pags/2008 0809190947.html.
389. See supra Part III.C.
390. This was the case with the Río Manso in Region X. See Escasez y Alta Demanda por Derechos de Agua Disparan Precios, ESTRATEGIA, June 26, 2008.
391. See, e.g., Proyecto de Ley Busca Nacionalizar el Agua, LA NACIÓN, Mar. 20, 2008;
392. Claudia Urquieta Chavarría, Obispo de Aisén Lanza Dura Carta Medioambiental con Leonardo Boff, EL MOSTRADOR, Aug. 25, 2008, available at http://www.defendamoslaciudad.cl/modulos. php?mod=noticias&fn= 94e679ab46d568928ad91afb91a749bb&id=1037;
393. Humberto Peña Torrealba & Pablo Jaeger Cousino, ¿Nacionalización del Agua?, EL MERCURIO, Dec. 20, 2008, available at http://www.unesco.org.uy/phi/conapahi/chile/fileadrnin/templates/conaphi. cl/documentos/Nacionalizacion-del-Agua-HP-PJ-20122208.pdf.
394. The New York Times picked up the story of "the country's intensifying water wars." See Alexei Barrionuevo, Chilean Town Withers in Free-Market for Water, N. Y. TIMES, Mar. 14, 2009, at 8 (quoting and partially misquoting Carl Bauer).
395. Claudia Urquieta Chavarría, MOP se la Juega por Abrir Debate Político, EL MOSTRADOR, Jan. 7, 2009;
396. El Agua como Derecho Constitucional, EL MOSTRADOR, Sept. 21, 2009.
397. Roberto Sapag, Hierve el Agua, CAPITAL N. 255, June 26-July 9, 2009, at 40-48, available at http://www.capital.cl/reportajes-y-entrevistas/hierve-el- agua-2.html.
398. Id.
399. SNA se Enfrenta a Endesa en Demanda por Control de Embalses, EL DIARIO FINANCIERO, Apr. 25, 2008, available at http://www.chilepotenciaalimentaria.cl/ content/view/173358/ SNA-se-enfrenta-a-Endesa-en-demanda-por-control-de- embalses.html;
400. Claudia Urquieta Chavarría, La Última jugada de Endesa para Concentrar sin Contrapesos Derechos de Agua, EL MOSTRADOR, May 12, 2008, available at http://www.ecosistemas.cl/1776/fo-article-82026. pdf.
401. DEPARTAMENTO DE GEOFÍSICA, UNIVERSIDAD DE CHILE, COMISIÓN NACIONAL DEL MEDIO AMBIENTE CONAMA: ESTUDIO DE LA VARIABILIDAD CLIMÁTICA EN CHILE PARA EL SIGLO XXI, (Dec. 2006), available at http://www.conama.cl/ portal/1301/articles-39442-pdf -Estudio-texto.pdf.
402. See generally INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE, CLIMATE CHANGE 2007: SYNTHESIS REPORT, available at http://www.ipcc.ch/.
403. Gustavo Orellana Venegas, Cambio Climático Llevará al País a Modificar Fuentes de Energía, EL MERCURIO, Feb. 6, 2007, available at http://diario.elmercurio.cl/detalle/index.asp?id={8ee7f0cb-a23f- 4e82-8519-c7721e1ca746}.
404. Cristina Espinoza, 100 Millones de Dólares Perderá Sector Hidroeléctrico por Cambio Climático, LA NACIÓN, NOV. 21, 2009, available at http://www.lanacion.cl/100-millones-dedolares-perdera-sector- hidroelectrico-por-cambio-climatico/noticias/2009-11-20/205450. html.
405. See supra Part III.
406. See supra note 26 and accompanying text.
407. I owe this insight to David Tecklin.
408. For a more upbeat assessment written by the former head of the DGA, see generally Humberto Peña et al, Water and sustainable development: Lessons from Chile, GLOBAL WATER PARTNERSHIP POLICY BRIEF (2004), available at http://www.gwpforum.org/gwp/library/Policybrief2Chile.pdf;
409. see also Peña, Taking It One Step at a Time, supra note 75.
410. See generally JOHN MCPHEE, ENCOUNTERS WITH THE ARCHDRUID (1971);
411. MARC REISNER, CADILLAC DESERT: THE AMERICAN WEST AND ITS DISAPPEARING WATER 284-85 (1986).
412. See BAUER, AGAINST THE CURRENT, supra note 24.
413. See supra note 208 and accompanying text.
414. See generally POSTEL & RICHTER, RIVERS FOR LIFE, supra note 11.
415. See, e.g., Aylward, Freshwater Ecosystem Services, supra note 15;
416. Dustin Garrick et al., Water Markets and Freshwater Ecosystem Services: Policy Reform and Implementation in the Columbia and Murray-Darling Basins, 69 ECOLOGICAL ECON. 366 (2009).
417. BAUER, SIREN SONG, supra note 23, at 89-90.
418. See generally Kathleen Miller et al., Global Change in Microcosm: The Case of U.S. Water Institutions, 29 POL'Y SCI. 271(1996).
419. See Bakker, Neoliberalizing Nature?, supra note 32, at 543-46;
420. BARKER, AN UNCOOPERATIVE COMMODITY, supra note 32, at 18-42.
421. See generally BAUER, AGAINST THE CURRENT, supra note 24;
422. Bauer, Slippery Property Rights, supra note 24.
423. See BAUER, SIREN SONG, supra note 23 and accompanying citations; Bauer, The Experience of Chilean Water Markets, supra note 67.
424. Prieto, El Modelo Chileno, supra note 30;
425. Prieto & Bauer, Hydroelectric Power, supra note 30.