Morales also took advantage of the symbolism of May Day, the international day of the worker, to order troops to take control of installations of the company, a subsidiary of Red Electrica Corporacion S.A.

"We are nationalizing the Transportadora de Electricidad in the name of the Bolivian people as a fitting homage to the workers who fought for the recovery of our natural resources and basic services," Morales said during a ceremony at the presidential palace.

"We invested $220 million in generation and others profited. For that reason, brothers and sisters, we have decided to nationalize electricity transmission," he said.

He did not provide details on how the Spanish company would be compensated, but the nationalization decree says the state will negotiate an indemnization fee with Red Electrica.

Bolivian soldiers peacefully took over the company's offices in the central city of Cochabamba on Tuesday, hanging Bolivia's flag across its entry.

Red Electrica owned 74 percent of Bolivia's transmission grid, or 1,720 miles (2,772 kilometers) of high voltage lines. Two years ago on May Day, the Morales government assumed control over most of Bolivia's electrical generation and end-user sales, nationalizing its main hydroelectric plants.

Under Morales, Bolivia's first indigenous president, the government has moved to place what Morales characterizes as basic services — energy, water and telecommunications — under state control.

In the case of electricity, the government is returning to the public domain a sector that was privatized a decade ago.

"Just to make it clear to national and international public opinion, we are nationalizing a company that previously was ours," Morales said.

The 20 percent of the industry the government does not own is in the hands of small companies serving cities in the eastern lowlands that are not connected to the national grid.

In his first year in office in 2006, Morales announced he was "nationalizing" the oil and gas sector. He began extracting concessions from multinational energy companies, renegotiating contracts to give Bolivians greater control of and a bigger share of profits from the gas industry, the country's biggest ahead of mining.

In 2008, he used May Day to announce the completion of the nationalization of Bolivia's leading telecommunications company, Entel, from Telecom Italia SpA

However, his government has not been able to complete negotiations to set a price for indemnization for the power plant takeovers with GDF Suez of France and Rurelec PLC of Britain.

**Associated Press writer Frank Bajak contributed to this report from Lima, Peru.