More expensive electricity already forces 22% of Brazilians to delay the bill to buy food

The can picker Valquíria Cândido da Silva, 47, lives in a small house in Grajaú, south of São Paulo, with her husband and four children. With a family income of R$2,000, she had to stop paying the electricity bill to buy food for the month.

The energy bill, which before the pandemic was no more than R$ 60, reached R$ 370 this month. The water price jumped from R$30 to R$200 in the same period.

“I had no choice. The bill keeps rising and is so high that I had to postpone the payment in order to have something to eat at home,” said Valquíria.

“I didn’t pay for the water and I cut other expenses too, like clothes and leisure. I work for the bills. The boys are at school, we have expenses with them, and therefore I’m saving on almost everything”, he said.

In the plans is the construction of a wood stove to avoid paying more than R$ 100 for a gas cylinder. The collection of rainwater for washing clothes and bathing in basins also entered the radar.

Valquíria is part of the group of 22% of Brazilians who, in the face of the explosive rise in energy and water tariffs, are exchanging the payment of the electricity bill for the purchase of basic foods, such as rice and beans.

This is what a survey carried out by Ipec for the iCS (Instituto Clima e Sociedade) shows. Between November 11 and 17, 2021, the institute interviewed 2,002 people aged 16 and over in all regions of the country.

The survey showed that the increase in energy compromised, on average, half the budget of a quarter of low-income Brazilians (up to five minimum wages – today, R$6,060).

Energy has eroded at least 25% of the salaries of half of the Brazilian population.

Overall, four out of ten Brazilians reduced expenses by not buying clothes, shoes and appliances to pay for electricity. The low-income population contributed the most to this result.

Expense cuts were most severe in the Northeast and Midwest, where one in four residents (28% and 27%, respectively) delayed paying to go to the supermarket.

In Brasília, Ivânia Souza Santos, 38, still doesn’t know how she will be able to pay the electricity bill. Unemployed, she, her husband and three young children lived in a squat near the Planalto Palace, but were expelled with other families.

With a monthly allowance of R$ 600 paid by the Federal District government, she rented a small apartment — bedroom and living room — in a building in Itapuã, a neighborhood far from the federal capital.

In the building, three units share the same light meter and share expenses. “In October, the government stopped paying and, now, I have no way of paying this bill,” said Ivânia.

She says she asked a friend for a loan to pay off the rent. “With what’s left I bought groceries. The electric bill is overdue.”

The supply was not interrupted only because the other apartments made the payment and Ivânia remained in debt to the residents.

The energy tariff went up too much because the lack of rain, which made 2021 go down in history as the driest year in the last 91 years, reduced the volume of water in hydroelectric plants.

Therefore, since the beginning of last year, the government has more regularly authorized the contracting of energy produced by thermoelectric plants powered by diesel, coal and other fossil fuels, which charged more than R$ 2,000 per MWh (megawatt-hour), almost ten times the reference price.

The government also allowed energy imports from Argentina and Uruguay at similar prices.

The result of this policy for the consumer was a rise in the tariff twice above the inflation measured by the IPCA (National Index of Prices to the Broad Consumer), according to the iCS.

The calculations, according to physicist Roberto Kishinami, the institute’s senior energy coordinator, did not take into account the tariff flags and measures to circumvent the water crisis that, in an election year, will be left as a legacy for the next government.

In average values, electricity (tariff plus taxes) rose 1.32 times more than the IPCA during the eight years of Lula’s government; 1.1 times during the administration of former president Dilma Rousseff; 2.4 times under Michel Temer and twice under the Bolsonaro government.

Bolsonaro will leave a liability of more than BRL 140 billion to be passed on to consumers in 2023 – which will be under the management of a second term or a possible new government.

For experts, the weight of this policy will be greater for the poorest families. “For the richest, the bill, even rising more than inflation, does not compromise family income,” said Kishinami.

In a recent debate promoted by iCS, economist Paula Bezerra, PhD in energy planning from Coppe-UFRJ, stated that the richest 10% of Brazilians consume 2.5 times more energy than the poorest 10%.

However, for the more affluent, the account represents 2% of the family budget. Among the less favored, it can commit up to half of the income.

This disproportion is likely to get even worse with the approval of the law that opened the market for distributed generation, a mechanism that allows the installation of solar panels or generating units in each household with the forecast of abatement in the account if the expense is less than the production of each household. .

As this equipment requires investments, it will be a solution for higher income consumers to generate their own energy, avoiding the costs of the electricity grid of distributors. In other words: with fewer consumers with higher purchasing power sharing the costs of the national electricity system, there will be an even greater burden on the poorest.

The way out to avoid energy indigence, according to several experts in the sector, is the creation of a progressive tariff program. “This is a factor of injustice that needs to be corrected,” Kishinami said.

Following the example of the Ministry of Economy’s proposal, which intends to create an Income Tax that increases according to income, these technicians defend differentiated tariffs based on the monthly income of families. There are proposals of the kind in Congress, but they have been stalled for two decades.

The social tariff was an achievement in this regard, but it is no longer sufficient. “It locks consumption at 30 kWh (kilowatt-hour) per month,” said Paula Bezerra.

“This rate only covers light and an efficient refrigerator. As in most of these homes the refrigerator does not work properly, [boa parte da baixa renda] doesn’t fall into that range,” he said.

A reform of the electricity sector to correct these distortions is an urgent need, says former director of the ONS (National System Operator) Luiz Barata, since the difficulties of low-income consumers are immediate and do not justify plans that only look at the long term.

The MME (Ministry of Mines and Energy) stated that the discussion on a new tariff model is in the project that deals with the modernization of the electric system and that the poorest did not participate in the apportionment of the increase in generation costs.

Through its advisory, the ministry said that, as of this year, the social tariff will be granted automatically.

“It will no longer be necessary to ask the distributor,” said the ministry. “Currently, about 12.3 million families in Brazil receive the social tariff. Estimates indicate that there are more than 11.5 million families able to take advantage of the discounts.”