As of January 1, 2017, these two main grids (and afterwards the SEN) consolidated their system operations under a single independent system operator, the National Electric Coordinator ("Coordinador Eléctrico Nacional", or "CEN"). The CEN's main functions include ensuring a reliable, adequate supply of electricity into the system, directing the dispatch of generating facilities to assure an efficient, reliable and economic operations, monitoring market competition and payments in the system and reporting on the use of energy from renewable sources. The CEN is subject to the oversight by the National Energy Commission (the "Comisión Nacional de Energía", or "CNE").
In 2013, the Chilean government enacted law No. 20.698, which in turn amended law No. 20.257, the Non-Conventional Renewable Energy Law, which promotes the use of non-conventional renewable energy, or "NCRE," and defines the different types of technologies qualified as sources of NCRE as wind, solar, biomass, geothermal and small (<20MW) hydroelectric technology. The law requires that any load serving energy supplier must source a portion of the electricity from NCRE sources.
The current legislation requires that load serving energy suppliers who enter into contracts on or after July 1, 2013, must source at least 9% of their total supply from NCRE generation by 2017. That requirement increases by 1% annually, reaching 12% in 2020, with further increases to reach 20% in 2025. Suppliers can meet their NCRE requirements by developing their own NCRE generation capacity, purchasing from other market participants with excess NCRE credits, or paying the applicable fines for non-compliance.
The current penalty for non-compliance (at the current applicable exchange rate) is approximately US$28 per MWh of deficit with respect to such supplier's NCRE generation obligation, as certified as of March 1st of the following year. The penalty rate increases for the following three years to US$42 per MWh. Should the supplier comply for the following three years, the penalty rate would revert back to the base rate of US$28 per MWh.
On June 22, 2016, Law No. 20.928 was published, establishing a new “tariff parity” system. This system seeks to equalize tariff rates for residential customers both across the country, as well as within a supplier’s residential customer base. The Law and its terms are not yet in force, pending the issuance of the necessary enabling regulations.
Financial Information about Segments
The Company has two reportable segments: Solar and Wind. These segments comprise the Company's entire portfolio of renewable energy assets and are determined based on the management approach. This approach designates the internal reporting used by management for making decisions and assessing performance as the source of the reportable segments. The Company’s operating segments consist of Distributed Generation, North America Utility and International Utility that are aggregated into the Solar reportable segment and Northeast Wind, Central Wind, and Hawaii Wind that are aggregated into the Wind reportable segment. The operating segments have been aggregated as they have similar economic characteristics and meet all of the aggregation criteria. Corporate expenses include general and administrative expenses, acquisition costs, formation and offering related fees and expenses, interest expense on corporate-level indebtedness, stock-based compensation and depreciation, accretion and amortization expense. All net operating revenues for the years ended December 31, 2016, 2015 and 2014 were earned by the Company's reportable segments from external customers in the United States (including Puerto Rico), Canada, the United Kingdom and Chile.
For the year ended December 31, 2016, significant customers representing greater than 10% of total operating revenue were Tennessee Valley Authority and San Diego Gas & Electric, which accounted for 11.2% and 10.0%, respectively, of our consolidated operating revenues, net.
Historically, the Company has not had any employees. Through the end of 2016, the personnel that managed our operations (other than our Chairman and Interim Chief Executive Officer Peter Blackmore, our Chief Operating Officer, Tom Studebaker, and our Interim Chief Accounting Officer, David Rawden) were employees of SunEdison and their services were provided to the Company under the MSA or project-level asset management and O&M services agreements. In a number of cases, the personnel that have been providing services to us have in the past simultaneously provided services to SunEdison and/or TerraForm Global. Following the SunEdison Bankruptcy, as part of our efforts to create a stand-alone corporate organization, we have identified and established a retention program for key employees. As of January 1, 2017, the key employees that provide most of our corporate-level services were hired directly by the Company to ensure continuity of