Lobbyist offensive can put more than R$ 100 billion from the consumer on the electricity bill

The companies’ strategy of resorting to Congress in search of benefits, even with the risk of raising the electricity bill, gained momentum at the end of the year. Three projects are being processed simultaneously which, if approved, would increase consumers’ costs by more than R$ 100 billion and, in addition, create regulatory risks in confrontations with Aneel (National Electric Energy Agency).

Gas, solar energy and wind energy are the benefited segments. Each project has its particular controversy, but the result of all is to change values ​​that will be paid by the energy consumer to meet sectoral interests, say specialists in the sector.

“Every speech in Congress is about lowering the bill, but the practical actions are in the opposite direction, of increasing it”, says Eduardo Barata, president of the National Front of Energy Consumers. “The last movements of the parliamentarians do exactly that — in fact, with the detail that they seek to lower the bill for a few and increase it for the majority, including the poorest.”

Different surveys already demonstrate how the cost of energy is strangling the family budget. One of the most recent is an extensive survey by Datafolha, carried out at the request of Abraceel (Brazilian Association of Energy Traders).

The survey identified that 72% of consumers stopped buying consumer items to pay the electricity bill, 67% have the electricity bill as one of the biggest monthly family expenses and 44% stopped paying any electricity bills this year.

“The family balances the budget by delaying the payment of a bill to buy food, for example”, says Clauber Leite, Póllis Institute’s energy coordinator. “When a congressman attends a lobby, he should be aware that he participates in it.”

Project wants to double tax exemption period for solar generation

PL 2703/2022, by Federal Deputy Celso Russomanno (Republicans/SP) amends Law 14,300, known as the new legal framework for MMGD (distributed microgeneration and minigeneration), which is eminently solar energy. The text extends from 12 to 24 months the deadline for accessing subsidies for the use of transmission and distribution networks.

Under the current rule, the subsidy will already cost R$ 5.4 billion next year alone, according to Aneel. The extension of the term can add from R$ 3.5 billion to R$ 5 billion per year to the account, depending on the number of investors who adhere.

At the limit, in present value, the cost of the extension could reach R$ 50 billion until 2045 according to the estimates of the PSR consultancy, one of the most respected in the sector.

The distributed generation segment is used by the upper middle class, by banks, retail chains and pharmacies. The subsidy is paid only by consumers linked to the distributors. Therefore, industry experts warn that those who pay this bill are the lowest-income consumers, who do not have the money to install their own solar panels.

“We all reached a difficult convergence in the approval of the law, and consumers accepted to continue paying for very high subsidies in the name of solving the problem”, says Paulo Pedrosa, president of Abrace (Brazilian Association of Large Energy Consumers and Free Consumers). “Postponing this nonsense now seems unacceptable to consumers who pay for the GD party.”

The project is awaiting a vote in the plenary of the Chamber and the deputy is trying to achieve urgency for the matter.

Text seeks to suspend regulatory agency resolutions

PDL (Project Legislative Decree) 365/2022, by Deputy Danilo Forte (União Brasil-CE), seeks to suspend two Aneel normative resolutions. The market follows the procedure with apprehension.

“The Legislative is treating Aneel, and this is extremely serious”, says consultant Ângela Gomes, who monitors regulation and price issues at PSR. Recently, the consultancy dealt with the subject of tariffs in two reports and drew attention to the weight of increases via Congress.

The disputed regulations reallocate transmission costs between consumers and generators across the country. In the North and Northeast, the change reduces the bill for those who consume and increases it for those who produce energy. If the PDL succeeds, it cancels an average reduction of 2.4% in tariffs for consumers in the Northeast and 0.8% in the North, returning R$ 1.23 billion per year to the electricity bill in these regions.

The bill has already passed the House and moved to the Senate.

Amendment adds gas pipeline network costs to the tariff, the so-called brasduct

Bill (Bill) 2316/22 was amended by Deputy Rodrigo de Castro (União Brasil-MG) which includes the costs for installing a national network of gas pipelines in Brazil, called brasduto, in the transmission tariff.

The installation of this pipeline system is estimated at R$ 84 billion. This amount would increase the transmission fee by 30%. As this item represents 15% of the final tariff, the increase would be 5% in the electricity bill, according to estimates by Embrace.

The value, however, may be higher, as the cost of the pipelines may exceed R$ 100 billion.

The PL awaits the opinion of the rapporteur of the Commission for Economic Development, Industry, Commerce and Services. The report contacted deputy Castro’s advisory, who did not return until the publication of this text.

Frictions grow between parliamentarians and Aneel

The recent rounds for discussions of projects in the energy area in Congress are marked by a new component, a growing confrontation between parliamentarians and the regulatory agency.

Deputy Russomanno’s project, for example, serves entrepreneurs who complain about the slowness of distributors in making the connection of new projects to the system anchored in the agency’s delay in regulating important provisions of the law on DG (distributed generation).

“Aneel would have to complete the regulation within 180 days after the enactment of the law, that is, by July of this year, but it should not be ready before January of next year. Because of this, the distributors claim that they cannot apply points of the law.”, says lawyer Bábara Rubim, vice-president of the board of directors of Absolar (Brazilian Association of Photovoltaic Solar Energy).

“The project corrects this, also giving a strong signal to Aneel that it cannot disobey a federal law.”

The deputy, who is part of the Commission for Consumer Protection, reinforces the argument. “Aneel is causing great damage to consumers who want to generate their own energy”, says Russomanno.

Agency and distributors refute these arguments.

According to Hélvio Guerra, director of Aneel, in the approval of public consultation number 51, of 2022, made at the request of the associations themselves, Aneel already explained that access to the benefit is guaranteed for those who present their project within the period provided for by law.

“The provisions of Law 14,300 are self-applying”, says Guerra. “They do not depend on complementary regulation by Aneel for them to be fully effective, not causing harm to consumer-generators.”

The connections, in turn, are being made, according to Marcos Madureira, president of Abradee (Brazilian Association of Electric Power Distributors). Solar energy, he says, is experiencing exponential growth, with excellent returns and is firmly on its way to being the second largest source in the country.

“After the enactment of the law, until last month, 547 thousand plants were connected, a growth of 20% compared to last year, with 1,800 connections per day”, he says.

Deputy Danilo Fortes’ legislative decree, in turn, is a direct clash with Aneel because of a change in the collection of Tust (Tariffs for the Use of the Transmission System).

The financial methodology of the Brazilian electricity sector is organized to charge more from those who burden the system the most. Since the end of the 1990s, the calculation of transmission considered the volume and flow of energy within each region, divided into North, Northeast, Southeast/Center West and South. This was possible because generation and consumption were essentially located within each of these submarkets.

In the last decade, the North has concentrated a large hydroelectric plant and the Northeast is experiencing a boom in wind and photovoltaic projects. The Southeast/Center West and South began to import a growing volume of energy from new ventures further away. That is, North and Northeast charge more, but pay less.

Aneel then revised the standard. In the rearrangement, the value of transmission in the North and Northeast rose for companies and fell for consumers. In the Southeast/Center West and South, there was an increase for consumers and a decrease for companies in the sector. Technically, an item of the transmission called the locational signal was changed.

Deputy Danilo Fortes and entities in the area of ​​renewable energies say that the decision is a mistake.

“Aneel’s measure will discourage new investments in the Northeast, and energy will be more expensive there, because they will prefer to put solar panels there in Taubaté, in the interior of São Paulo”, says Fortes. “My project wants to guarantee investment and jobs in the Northeast. Today we have 14,680 young people working in the sun and wind sectors.”

Elbia Gannoum, president of Abeeólica (Brazilian Association of Wind Energy), outlines a more striking scenario.

“Wind and solar generators are in the Northeast due to the nature of the region, and if it becomes more expensive there, they will not produce in the Southeast, where it is not competitive, and we will have more thermal and less renewable”, she says.

Sector specialists, however, claim that all renewable energy sources are competitive today, with an above-average return on investment even without subsidy, and entrepreneurs try to push costs inherent in the business.

“Those who are generating far from the place of consumption and will demand more transmission lines need to pay for it, Aneel is absolutely right”, says Carlos Faria, director-president of Anace (National Association of Energy Consumers). “Congress just wants to favor groups of wind and solar generators to the detriment of consumers.”

The agency, in turn, has reaffirmed that its decision was taken after consulting all agents in the sector.

“We understand that the solution to the problem was not trivial, so we launched three phases of public consultation, with more than 200 days for contributions, with the participation of several actors in the Brazilian electricity sector”, explains Hélvio Guerra, direct from Aneel .

According to Guerra, Aneel also proposed a transition period for tariffs to gradually converge, minimizing the impact of the increase on generators who, in the agency’s assessment, today pay less than they should.