Bolivia has brought two Spanish-owned electricity companies under state control.
President Evo Morales accused the subsidiaries of Iberdrola of overcharging consumers in rural areas.
He said rural households had been paying three times more for their electricity than people in urban areas.
The BBC reports Mr Morales has previously nationalised oil and telecommunications companies.
Mr Morales said an independent arbiter would decide in up to 180 days how much compensation Iberdrola will get for its assets. The company said it hoped to be paid a fair price.
Iberdrola owned 89.5% of Electropaz, which operates in La Paz and surrounding areas, and 92.8% of Elfeo, based in the Oruro region.
Armed police guarded their headquarters and plants in both cities as the announcement was made.