Introduction of Competition in Regulated Markets: Analysis of Colombia’s Natural Gas Industry

• Author / Creator

  Pando Lopez, Luis A

• This dissertation deals with the introduction of competition in regulated industries such as natural gas. The thesis focuses on the recently developed Colombian natural gas market and uses a more mature market, the deregulated gas market existing in the province of Alberta, Canada, as a benchmark for comparison. First, this thesis analyzes and compares the civil law concept of service public and the common law concept of public utilities. In particular this thesis discusses the Colombian notion of domiciliary public service (SPD) that under Colombian law applies to the distribution of natural gas and the complementary activities of production, supply, transportation and retail. Second, it studies the theories and justifications for government regulation of public utilities and SPDs, mainly the public interest theory and the economic theory of regulation, as well as the main lines of criticism. Third, this dissertation analyzes natural gas markets from the viewpoint of competition law, applying the methods and concepts from this area of law. Through the methodology of market definition used by competition authorities, this thesis makes a diagnosis of the Colombian natural gas market, both in its product and geographic dimensions, reviewing the agents and activities involved in the natural gas fuel cycle, and discussing the main aspects of regulation of gas utilities and SPDs in Colombia. In this respect, the thesis focuses on the regulatory agency, the Colombian Energy and Gas Regulatory Commission (CREG), its mandate and statutory framework, and its main powers and duties regarding gas services. With respect to the introduction of competition into regulated industries such as natural gas, this dissertation discusses gas liberalization and the usage of instruments such as unbundling and open access. This thesis analyzes the gradual liberalization that has been occurring in Colombia’s natural gas sector, and the competition issues that have been identified in a number of studies conducted for the Colombian Ministry of Mines and Energy. To provide context to these problems, this thesis discusses some problems identified during the deregulation of natural gas in Alberta, particularly at the distribution and retail level. This dissertation also discusses the new idea of competition advocacy as a tool to assess the impact of government regulation in the markets and a mechanism to create a culture of competition within the government. Finally, this thesis defends the idea that consumer protection is in the public interest, and that effective representation is a key aspect of consumer protection. As an example of effective representation, this thesis analyzes the Utilities Consumer Advocate in Alberta and its mandate to represent residential, farm and small business consumers of electricity and natural gas, and reaches the conclusion that the current problems affecting SPD consumer protection in Colombia could be tackled with the implementation of either a government agency in charge of representing consumers or independent consumer organizations with the right to participate in regulatory proceedings and the ability to recoup the costs of intervention.

• Subjects / Keywords

  • Consumer Protection
  • Competition
  • Natural Gas
  • Domiciliary Public Services
  • Colombia
  • Regulation
  • Public Utilities

• Graduation date

  Fall 2016

• Type of Item

  Thesis

• Degree

  Master of Laws

• DOI

  https://doi.org/10.7939/R3H41JV7G

• License

  This thesis is made available by the University of Alberta Libraries with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.