Venezuela’s Legislature Votes to End State Electricity Monopoly After Two Decades

Caracas — In a historic about-face, Venezuela’s National Assembly has given preliminary approval to legislation that would dismantle the state monopoly on electricity, inviting private investment into a sector nationalised in 2007. The draft law, passed in a first debate on Tuesday, would allow private companies, mixed enterprises and firms with minority state participation to generate, distribute and sell electricity alongside the state, according to documents seen by Bloomberg. The bill, championed by Executive Vice President Delcy Rodríguez, also mandates that tariffs reflect real costs and enable operators to earn a “reasonable return” on their investments. The reform must still clear a second and final vote but marks a clear break with the statist energy policies of the late Hugo Chávez.

The legislative push comes as Venezuela’s crumbling grid buckles under years of underinvestment and mismanagement, with crippling blackouts now a daily reality. In a related move, new draft regulations for the oil sector would require petroleum and gas firms to become self-sufficient in power generation, bringing their own plants to operate facilities in remote zones, as reported by sources familiar with the matter. The measure reflects the authorities’ recognition that the national grid cannot reliably supply even its most strategic industries, underscoring the urgency behind the electricity reform.

The energy overhaul unfolds under a new political order heavily shaped by Washington. Since the capture of President Nicolás Maduro in January and his transfer to US custody, the White House has effectively exercised financial oversight. Airlines operating in Venezuela were notified in late May that payments for jet fuel must be deposited directly into a US Treasury custodial account, bypassing the state oil company PDVSA entirely, according to industry circulars and company sources. President Donald Trump has publicly endorsed Rodríguez, stating she is “doing a great job” and anticipating an oil-fuelled bonanza, though production has risen only modestly to just over one million barrels per day.

Viewed from Western capitals, the market opening is a logical culmination of months of de facto US receivership. Yet analysts in London and elsewhere caution that the reforms, however bold, face formidable obstacles: lingering secondary sanctions, investor uncertainty over the durability of the political transition, and the sheer scale of infrastructural decay. The dual-track strategy — privatising power generation while forcing oil majors to fend for themselves — suggests a pragmatic scramble rather than a coherent master plan. Whether private capital will respond in the absence of credible legal and political guarantees remains the defining question.