Aneel decides to cancel J&F’s anti-rationing thermal license

Âmbar Energia suffered, this Tuesday (18), a defeat at Aneel (National Electric Energy Agency). The board of the agency concludes that the delay in the delivery of four gas plants was the sole responsibility of the company. With this definition, the agency opened a process to terminate the electricity commercialization contracts and also to revoke the grants.

In the assessment of the rapporteur of the case, director Ricardo Lavorato Tili, the arguments presented by Âmbar, such as delays in environmental licensing and customs and equipment delivery delays, although they may be unpredictable facts, represent risks inherent to the business.

Although there is still room for appeal, industry experts consider that, this time, it will be difficult for the company to reverse the process, given the rigor of the terms used at Aneel to justify the decision.

When contacted, the company did not respond to the report.

The agency’s director general, Sandoval Feitosa, set the tone. He highlighted the urgency of taking a final decision on the case of Ámbar, given the importance of the topic for energy consumers. Aneel’s attorney general, Luiz Eduardo Araújo, echoed and recalled that a more agile definition was compromised by the fact that Âmbar forwarded the requests with secrecy, which could not have occurred in a case that demands transparency and debates with consumers of energy.

Director Hélvio Guerra, who had previously voted in favor of the company, reviewed his vote, reinforcing his understanding that Âmbar did not fulfill its commitments.

CONTROVERSIAL PROCEEDING

The fate of the company’s four thermal plants, EPP 2, EPP 4, EDLUX 10 and Rio de Janeiro 1, has been the subject of controversial meetings at the agency since May, attracting opposition from market entities, the MME (Ministry of Mines and Energy), which considered the benefit to the company illegal, and even the TCU (Union Court of Auditors), which has a process underway to evaluate the conduct of directors who voted in favor of the company’s demands.

Ámbar is the energy arm of J&F, which also controls JBS, the world’s largest global meat company. Its four thermal plants are among those that won an emergency auction in October last year, called PCS (Simplified Competitive Procedure), which should operate from May 1, 2022 to December 31, 2025, with very advantageous contracts.

As the auction took place at the time of the water crisis, the price of energy within the PCS was R$ 1,560 per MWh (megawatt-hour). Today, with the hydroelectric reservoirs full, the market works with a spot price of R$ 55.70 per MWh.

All 17 PCS thermal plants would cost an additional R$ 39 billion in the electricity bill during this period, according to estimates by Abrace (Brazilian Association of Large Energy Consumers and Free Consumers). Amber’s four thermals, however, were the most significant in this cake. They would correspond to almost half of the total, around R$ 18 billion.

In the back-and-forth of decisions at Aneel, Âmbar received a preliminary injunction (a type of provisional decision), which allowed it to use a plant already in operation, the Cuiabá thermal plant, in place of the four projects still under construction. The injunction was suspended, but the company was the winner in the judgment on the merits.

However, in order to carry out the exchange definitively, Âmbar assumed the commitment to start the operation of the four new projects within the deadline, which did not happen. Subsequently, the company tried to justify the delay through the instrument called the exclusion of liability.

This Tuesday, the board of Aneel denied this request, triggering the exclusion of projects and bringing other consequences.

Âmbar lost the right to use the Cuiabá thermal plant within the PCS rules and the benefits that had been given during the validity of the precautionary measure.

Director Fernando Mosna, in his first statement on the subject after taking office, even defended the revision of the amounts already paid to the company.

In practice, this means that that operation, remunerated by the PCS value, must be recalculated at the value paid by the spot market at the time. The company will have to return what it received in excess and also pay the fines.

The CCEE (Chamber of Electric Energy Trading) said it could not open the amount of the fine owed by Âmbar, but reported that, in all, the amount of penalties calculated totaled R$ 1.7 billion in settlements from May to August. Of this amount, R$ 392 million were paid or written off from credits.

ENTITIES CELEBRATE

Entities in the sector celebrated Aneel’s decision. The result represents legal certainty for the market and for consumers, assesses Anace (National Association of Energy Consumers).

A PCS contractual clause prohibited old thermal plants from participating in the auction or replacing new projects. The directors of Aneel, however, disregarded this determination, arguing that the exchange for the Cuiabá plant would be a financial benefit for the consumer. Later analysis, however, demonstrated the opposite. There could even be an increase in costs for those who pay the electricity bill.

“The precautionary measure could not have been accepted by the regulator for the simple fact that, under such conditions, the entrepreneur would disrespect the rules of the PCS itself, opening a precedent of legal uncertainty for the Brazilian electricity sector”, said Mariana Amim, director of Public Affairs Anace Technical and Regulatory.

“Consumers have always paid dearly for legal security in the electricity sector,” said Paulo Pedrosa, president of Embrace, who gave oral support at the Aneel meeting this Tuesday in defense of consumers. “This time, that principle came in favor of the consumer. It wouldn’t make sense for it to be ignored.”

with Reuters