Eletrobras’ contribution can alleviate electricity bill readjustments

The allocation of R$ 5 billion from the privatization of Eletrobras to a sectoral fund may reduce the rise in electricity tariffs this year by up to three percentage points for residential consumers, but the average readjustment should still be high, in the double-digit range , point out expert calculations.

The contribution of resources by Eletrobras for reasonable tariffs is uncertain, since it depends on the conclusion of the capitalization offer, but it started to be considered more concretely by the government and by Aneel (National Electric Energy Agency) after the approval given to the Eletrobras offer by the TCU (Union Court of Auditors).

On Tuesday (24), Aneel decided to postpone the tariff readjustment of Cemig, which owns one of the largest distributors in the country, as it understands that Eletrobras’ contribution to the Energy Development Account (CDE) may take place until July, as pointed out by the government to the regulator.

The PSR consultancy predicts that the injection of resources could reduce the average nominal adjustment for residential consumers by around 2.5 percentage points, estimated at 20.6% for 2022.

Already TR Soluções, a technology company specializing in tariffs, calculates a relief of about 3 points with the contribution, compared to the 11.9% readjustment, on average, projected for the residential class this year.

The PSR and TR projections have some differences in the assumptions, but in general, they point to a tariff pressure due to inflation, an increase of more than 30% in the CDE budget – the main burden of the electricity sector – and incurred by the water scarcity situation last year.

Several annual readjustments already approved by Aneel for distributors this year exceed 20%, which provoked a strong reaction from Congress.

Parliamentarians proposed a legislative decree to stop the readjustments and, more recently, a project to set a ceiling for ICMS levied on electricity and fuel.

According to TR Soluções, the average readjustment of residential tariffs was 17.7% in the first four months of 2022.

Rodrigo Gelli, PSR’s technical director, recalls that a series of costs in the electricity sector due to extraordinary situations, such as the pandemic and the water crisis, were “pushed” forward, which tends to keep tariffs under pressure.

He cites the two billion-dollar loans contracted by the sector to guarantee the flow of payments and momentarily alleviate tariffs in recent years, in addition to postponing the payment of compensation to broadcasters.

“We have a lot of stuff hanging in the tariff that will mitigate the expected benefit with the end of Itaipu’s debt payment (in 2023),” he said.

The debt for the construction of the binational Itaipu plant should be fully repaid by 2023, which should lead to a significant reduction in the tariff associated with the project.