Chamber approves ‘mutant tortoise’ that raises electricity bill by R$ 118 billion

The Chamber of Deputies approved, this Tuesday (6), a proposal that extends for another six months the entry into force of the Legal Framework for Distributed Generation and may cause an increase in the energy bill, in addition to including a “mutant tortoise” with potential environmental impacts.

The original proposal provided for a 12-month extension. After pressure from opposition parliamentarians, the rapporteur Beto Pereira (PSDB-MS) changed the proposal and reduced this deadline by half. The text now goes to the Federal Senate.

According to Abradee (Brazilian Association of Electric Energy Distributors), even with the concession made by the rapporteur, the impact of the approved measure is R$ 118 billion until 2045.

Only with the extension of the entry into force of the new regulatory framework brings an impact of BRL 39 billion.

“The maintenance and expansion of subsidies for a category that does not need it, because it is already highly profitable, comes to the detriment of the lower income population”, stated the president of Abradee, Marcos Madureira.

“It brings high costs to be paid by the Brazilian population for the benefit of a category”, he added.

The project initially dealt only with the exemption granted to so-called distributed generation — mostly energy generated by solar panels.

But a tortoise was added to the project, which determines that gas-fired thermal plants be replaced by PCH (Small Hydroelectric Power Plants) and extends the right to exemption from distributed generation to these hybrid projects.

Jabuti is the jargon to define an excerpt unrelated to the original proposal of a bill, as is the case here.

The change in this proposal is considered so drastic that it is being described as a “mutant tortoise”, explains Luiz Eduardo Barata, president of the National Front of Energy Consumers. The entity has been gathering efforts to stop the advance of the electricity bill in initiatives like this one in Congress.

During the course of the privatization of Eletrobras, congressmen included in the project the obligation to build 8,000 MW (megawatts) of gas thermal power plants. These thermals became known as Eletrobras’ tortoises.

Of this total, 2,500 MW would have to be installed in the Midwest.

Deputy Beto Pereira’s proposal, experts say, is a new tortoise to change the old one. It converts 1,500 MW of thermal power plants in the Midwest into smaller hydroelectric plants, such as 30 MW. These new projects, in addition to not paying for the use of the wire, would be exempt from the other subsidies foreseen for the DG segment, which are currently paid for in part by this type of undertaking.

These changes bring an additional impact to the BRL 79 billion project, says Abradee

The proposal is also seen as an environmental risk. As each PCH would have a maximum of 30 MW, it would be necessary to spread thousands of small projects across the Midwest, where important environmental reserves are located, such as the Pantanal.

“We were already against the original change of this PL, which extends the term of the subsidy, as it is a social injustice to charge the poorest a benefit that favors the richest consumer”, says Barata.

Abrapch (Brazilian Association of PCHs and CGhs) defends the measure and says that the inclusion of PCHs will actually result in savings of R$ 13 billion for the country.

“Such statement is justified from an analysis of the average prices practiced in the last energy auctions, where the ceiling price of the auction of new energy (A-5) for PCHs was R$ 352/MWh, while the ceiling prices of Eletrobras’ thermal auctions were BRL 444/MWh, resulting in savings of more than BRL 13 billion”, said the entity’s president, Alessandra Torres de Carvalho, in a note.