Energy distributors question full refund of credits to consumers

Electricity distributors are considering challenging in court a law passed in June that determined the full return, to consumers, of tax credits earned after the exclusion of ICMS from the PIS/Cofins calculation base on electricity bills.

Even having already returned billions of figures to consumers, some concessionaires understand that they have the right to appropriate part of the values, since they were the ones who sought justice against improper collection in the past.

There is no consensus on the subject in the distribution segment, and each company has acted according to its own understanding.

Light, for example, from the state of Rio de Janeiro, sees the law as unconstitutional and last month obtained an injunction in court to prevent an extraordinary review of its tariffs on account of the return of credits.

Other companies, such as state-owned Copel and Cemig, recorded billionaire provisions in their balance sheets for the second quarter after the law was enacted, with a loss of net income for the period.

In the latest quarterly releases, Copel and CPFL reinforced that they are evaluating measures on the subject — including legal measures, in the case of Paraná — for not agreeing with the full reversal of the credits.

“You have distributors who chose not to discuss (the law), who understood that it is not worth it. There are other companies that do accounting recognition for conservatism, but still want to discuss. There are others that are still studying the values”, explained Alexei Vivan , lawyer and president of ABCE (Brazilian Association of Electric Power Companies).

‘VOTEER’

For Vivan, the law is “electoral”, as it produces important relief from tariffs in the midst of inflationary pressure, and has flaws of unconstitutionality.

Among the problems of the law, the lawyer points out, for example, that it determines the return of credits that already had prescribed periods (over ten years), which would constitute an acquired right of the distributor.

He also points out that the law did not consider that the concessionaires had expenses to pursue the issue in court in the past, even before the Federal Supreme Court finished judging, in 2021, the case of the exclusion of ICMS from the PIS/ Cofins, known as the “thesis of the century”.

“All are in favor of low tariffs, because this is favorable to consumption, reduces defaults, increases competitiveness… But this has to be done with parsimony and reasonableness”, said the president of ABCE.

For him, the position of the regulatory agency Aneel in an open public consultation on the subject may determine an eventual judicialization.

According to data from Aneel, tax credits total R$ 60 billion and began to be reversed in tariff processes in 2020. Only two of the 53 distributors in the country have not filed lawsuits to obtain them.

After the law was passed in June, Aneel promoted an extraordinary tariff review of several distributors in the country.

Light was one of the concessionaires that should have undergone a tariff review, but a court decision in favor of the company barred the process.

According to Fitch Ratings, the pass-through of tax credits would put pressure on Light’s credit profile, increasing the risk of breaching financial covenants. According to the rating agency’s data, the balance of credits to be returned by the company was approximately R$800 million.

In an earnings conference call last week, executives at the electric company ruled out the risk of breaching covenants, explaining that the metric used is adjusted Ebitda, which excludes non-recurring items. They also said that the company is being well advised on the matter, “with robust opinions” that do not point to the need for provisions on credits at the moment.