Energy distributors profit more in the water crisis even with higher debt

Even more indebted, energy distributors on average profited much more during the height of the most recent water crisis. The rise in electricity bills fueled the rise in inflation.

Economatica survey carried out at the request of leaf shows that, from June to September 2021, the Ebitda (earnings before interest, taxes, depreciation and amortization) of electric companies was R$ 110 billion.

The monthly average is R$ 27.5 billion compared to R$ 14.8 billion per month in the same period of the previous year.

Companies such as Energisa, Celpe, Cesp, Neonergia and Rede Energia recorded the highest increases in Ebitda in the period, ranging from 46% to 62%. Market analysts say that much of the rise is due to excessive bailout by the Jair Bolsonaro government (PL) to the sector.

In addition to the second round of loans coordinated by BNDES (National Bank for Economic and Social Development), the companies had the postponement of payment of charges and taxes. This weighed heavily on the result.

“It was an overdose aid under the argument that they could not break or cause damage,” said economist and industry analyst Maurício Gutemberg.

The second round of financial assistance, expected for February, will be coordinated by BNDES and will have lower interest rates. It is estimated to be less than R$ 14 billion, the value of the mismatch between costs and revenues estimated by Abradee (Brazilian Association of Electric Energy Distributors).

Inspired by a loan coordinated by the Dilma Rousseff (PT) government during the 2014 crisis, this aid was aimed at solving a liquidity problem for distributors, anticipating resources to these companies that would only be obtained in future tariff adjustments.

In order to define the necessary value, the sector assesses that it will be necessary to calculate how much the ONS (National Electric System Operator) will authorize in new energy contracts for thermal plants from January to April this year, when the term of the water scarcity flag expires.

It will also be necessary to determine how much will be granted in bonuses to companies that have joined the energy consumption reduction program.

The water scarcity flag was created by Aneel precisely to fund the strategy to face the drought on the hydroelectric reservoirs, but, even so, the deficit of the flags account is already over R$ 8 billion, according to the regulatory body.

This money, when released, will help distributors refinance debt and balance balance sheets.

In practice, the financial situation should improve, a scenario that had been perceived by the Stock Exchange’s investors. Therefore, the shares of companies in the sector went through the water crisis on the rise.

Analysts also considered the statement by Minister Bento Albuquerque (Mines and Energy) positive that the water scarcity flag, which adds R$14.20 for every 100 kWh (kilowatt-hours) consumed, will remain in effect until April at least. , even in a scenario of heavy rains and recovery of the water level in the reservoirs.

According to Economatica, the shares of the 40 companies in the area were worth BRL 390 billion in January this year against BRL 443 billion at the end of 2020, when the water crisis began to worsen with the government’s authorization to purchase energy produced by thermoelectric plants. .

In June 2021, the shares remained at the same level, around R$440 billion. This is also considering the increase in corporate debt, which jumped from BRL 285 billion in December 2020 to BRL 312 billion in September 2021 – an increase of BRL 27 billion in the stock of gross debt in the period.

When questioned, the MME (Ministry of Mines and Energy) replied, through a press office, that it took the best measures to mitigate the impact on the electricity sector of the worst scenario of water scarcity in the country’s history.

Most of these loans were taken by distributors, which act as cashiers for the electricity sector, collecting money from consumers to pass on to the energy generation and transmission segments, in addition to paying their own costs.

If costs rise too much, companies may face liquidity problems until the next tariff readjustments throw the extra expenses into the electricity bill.

“Distributors collect through tariffs or tariff flags [como a da escassez hídrica] the resources to pay generators for the energy that is made available to the regulated market [cativo]”, said Marcos Madureira, president of Abradee.

According to him, under normal conditions, the lag is assumed by the companies until the moment when, once a year, Aneel (National Electric Energy Agency) authorizes readjustments.

“Right now, the lag is very large, which has forced companies to use reserves, including holdings, and go to the financial market, taking resources at high rates and, therefore, impacting their cash flows that can lead to problems for their financial balance and even economic,” he said.

Industry estimates point to an amount equivalent to 60% of distributors’ Ebitda in new loans, with higher interest rates.

The increase in costs is basically due to the explosion in fuel costs for thermal plants that have been activated by the MME (Ministry of Mines and Energy) since October 2020 to generate energy that should have been delivered by hydroelectric plants since then.

Faced with the most severe water crisis in the last 91 years, the plants did not have water to run turbines and, thus, the distributors were faced with a bad situation: buying more expensive energy to fulfill the supply contracts.

Last year, this mismatch reached R$ 14.8 billion – an amount that was released by the government in a financing program for distributors called Conta-Covid.

This year, with the worsening of the crisis, the government decided to release a second round of aid to the sector that came out by means of a decree on Friday (14). From now on, it will be regulated by Aneel.

Madureira expects the funds to start being released in February. According to him, many costs have already been paid by the distributors with money obtained from their own loans.