Presidential candidates receive proposal that seeks to remove R$ 100 billion from the electricity bill

A proposal for restructuring the areas of electricity and gas, which is being presented to candidates for the Presidency of the Republic, brings measures that seek to save R$ 100 billion in costs that burden the electricity bill.

The amount is almost a third of the total expense.

The package was prepared by Abrace (Brazilian Association of Large Energy Consumers and Free Consumers). The entity represents 60 of the largest business groups in the country, which have 800 industrial units and account for 40% of industrial consumption of electricity and gas in Brazil.

The document details actions to remove subsidies from the energy tariff and transfer them to the Union Budget, renew the bidding model for concessions in the area and establish new pillars for pricing in the sector.

It also deals with the resizing in the use of renewable sources, so that solar and wind power have a greater weight in the composition of the national system, and outlines ways to accelerate the regulatory agenda in the area of ​​natural gas, including harmonizing the rules with the states to guarantee the effective creation of the new gas market.

Entity wants to change subsidies and charges

The review of subsidies and charges is one of the pillars in the suggested changes.

By the end of 2022, for example, Brazilians will pay BRL 144 billion in energy subsidies, charges and taxes alone, BRL 44 billion more than in 2021. The amount is almost double the government’s investment in year and is equivalent to 1.5 of the Auxílio Brasil budget.

“There was a strong movement to reduce ICMS on energy, which was important, but we understand that a more effective starting point is to reduce the charges on the energy bill in a structural way, because this would also lead to a reduction in taxes levied on energy”, says Paulo Pedro, president of Abrace.

“As it is today, governments are partners in the sector’s inefficiency, because the greater the inefficient costs in the electricity bill, the greater the collection.”

The study also defends measures that can encourage the recovery of the industry, considering the shock of cheap energy as one of the pillars. Currently, this segment already consumes more gas than the entire thermal park in the country. It is also heavily impacted by the rise in electricity prices.

According to Abrace surveys, the increase in energy prices, considering the direct and indirect impacts of the electricity bill, cooking gas and fuel, already compromises 18% of the Brazilian family budget, penalizing the poorest in particular.

In their government programs, the three candidates who lead the polls —Luiz Inácio Lula da Silva (PT), Jair Bolsonaro (PL) and Ciro Gomes (PDT) — prioritize investment in renewable energy, without addressing the issue of subsidies. Candidate Simone Tebet (MDB) chose cutting subsidies as a priority in her program.

Expensive energy raises the price of several products, says entity

More expensive energy also raises the cost of living in the country and inhibits growth, argues the entity. For every BRL 10 paid on the electricity bill, consumers pay another BRL 10 for the energy included in the products and services they buy.

The cost of energy in Brazil represents 33% of the price of meat and milk, 31% of the price of bread, 12.4% of the price of clothing and 14% of the price of a car, to name a few.

“Our understanding is that it is necessary to build consensus in the energy area to advance in a structural change that reduces energy costs”, says Pedrosa.

Abrace also works in the União pela Energia movement, which has 70 industry associations and federations, has made contributions to Fiesp and CNI in the energy area and is working to consolidate the proposals of the National Energy Consumers Front.

According to Pedrosa, meetings have already taken place with Simone Tebet, who studied and discussed the proposals, followed by a meeting with the person responsible for the candidate’s government program, economist Elena Landau, an energy specialist. They were also received by economist Nelson Marconi, coordinator of Ciro Gomes’ government plan, and his energy team.

In Luiz Inácio Lula da Silva’s campaign, they met with Maurício Tolmasquim, who held several positions in the energy area in PT administrations, and with members of the Perseu Abramo Foundation, which takes care of the preparation of the party’s proposals.

In government, the material was presented to the Minister of Mines and Energy, Adolfo Sachsida. At the same time, they seek to schedule a meeting with General Braga Netto, who coordinates the program of President Jair Bolsonaro in the search for reelection.

WHERE CAN THE SAVINGS OF BRL 100 BI PER YEAR COME FROM

Of the total of BRL 350 billion in energy costs per year could be cut:

17%

in charges, which today cost, per year, BRL 66 billion

6%

in taxes that affect the tariff in BRL 80 billion

3%

with modernization in the generation structure, which represents annual cost of BRL 120 billion

two%

with the restructuring of the distribution area, which represent BRL 50 billion annual

1%

in transmission costs, which account for BRL 28 billion

1%

with the fight against energy theft, which consumes BRL 6 billion annually