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tors claimed these limits did not cover their variable costs. Moreover, generators considered that Resolution 034 changed the rules of the game, since, according to their interpretation, complaints over market power can only be filed with SSPD, not with CREG. In addition, a plant that must always be dispatched must receive some return on investment, apart from remuneration for variable costs.25 ACOLGEN claims that the generators have not exerted market power at any time, but were merely trying to take advantage of a tied market to compensate for losses incurred because of Resolution 063 of 2000, which made them maintain valid bids for one week in case lines were out of service. While proving that exercise of market power is a difficult task, generators have ample incentives to take advantage of opportunities to compensate for the effect on cash flow, introduced by changes in capacitycharge methods, low market prices, and drop in power demand. Agents agree that CREG procedures have not been transparent and that generators have often lacked clues about the direction of changes. Some generators claim that CREG has not consulted sufficiently with the CNO and that resolution objectives have not been made explicit. Resolutions 034 and 092 were defined as temporary measures, but circumstances under which validity would cease are not yet explicit. The generators have gone to court on several occasions, using diplomatic pressure to advance their cause, even when their legal appeals have not been exhausted. Concentrating regulatory measures on power generation and transmission reflects the privatization sequence; that distribution fell behind may have been exacerbated by the novel intellectual challenges posed by design of a new wholesale market. Policies governing the natural gas sector have also experienced delay and lack of coordination, with regulation having had to face Ecopetrol’s political power and independence. 25
In fact, Resolution 034 has not recognized all variable costs, starting from a cost curve for a plant at maximum capacity, not including fixed fuel-transport costs or taxes, and considering only a fraction of start-up and shutdown costs. Similarly, the resolution has set a floor for generators with trapped energy, based on the added level of the reservoirs, following a procedure consistent with that of minimum operatives. Two months later, CREG issued Resolution 092, which recognized fuel costs, taxes, and exchange-rate variations, but omitted gas-transport costs. On the date of issuance, CREG sent a circular to the generators, requesting their suggestions on quantifying start-up and shutdown costs.
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ULPIANO AYALA AND JAIME MILLĂ N