This is a matter of Colbun, the second largest electricity generator in Chile, which is facing considerable uncertainty about the cost and availability of alternative energy sources. Problems with the contract the supply of natural gas and oil price volatility, combined with regulatory changes made by the Government, by force Colbun revise its business strategy and its power mix. The new legislation will replace the historically regulated electricity prices for some customers free market prices and, therefore, to change the conditions under which the company must operate. The case also concerns the pros and cons of different energy sources in relation to their perceived environment. As CEO, Bernardo Matte Larrain should take all these considerations into account when planning future Colbun, especially in light of the new opportunities and challenges associated with global climate change. The case examines the Chilean electricity sector and Colbun operations to illustrate the complexity of doing business under the influence of the global energy markets, government regulations, and environmental activism. "Hide
by Forest Reinhardt, Gustavo A. Guerrero, Sanjay Patnaik Source: Harvard Business School 26 pages. Publication Date: June 3, 2009. Prod. #: 709060-PDF-ENG
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