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Poverty

Fundación Eléutera expands the competitive energy market in Honduras

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Fundacion Eleutera energy header

Fundación Eléutera, an Atlas Network partner based in Honduras, has been working hard for years to introduce competition to the currently state-owned electricity sector. The state monopoly on the power grid and distribution has caused troubling shortages and high costs that hurt families, businesses, and entrepreneurs since the mid-1990s. Fundación Eléutera has shown that increased competition will lower prices and increase the grid’s reliability. As we noted in an article in 2020, the organization has been working consistently to improve implementation of a law they helped pass in 2014 which laid the groundwork for a freer energy market.

Access to the competitive electricity market is currently restricted to the largest energy customers, but the situation is improving. Regulators allow energy customers who meet a minimum power demand— “qualified consumers”—to purchase electricity from suppliers other than the state-run Empresa Nacional de Energía Eléctricia (ENEE) power company. In the initial step toward a competitive market, lawmakers set the minimum power demand for qualified customers at three megawatts, a massive amount of power that only allowed 27 customers to leave the government monopoly. As the grid operators saw the possible success of this model for consumers—as well as for the ENEE's financial hardships—Fundación Eléutera worked with regulators, the secretary of energy, and ENEE to drop the minimum power demand. Late in 2021, lawmakers decreased the minimum to 400 kilowatts, an encouraging step which allowed an additional 293 qualified consumers into the market.

While the system in Honduras is not yet a free and competitive energy market, and the new government is questioning the status quo, Fundación Eléutera’s policy recommendations have made exciting progress in that direction. As competitive energy companies prove themselves capable of providing stable, less expensive power to the people and businesses of Honduras, Fundación Eléutera will continue to work to expand their right to access it and continue to attempt to curb economic migration through upward social mobility.

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