Electricity bill should be without extra fee throughout the year, says ONS

The director general of the ONS (National Electric System Operator), Luiz Carlos Ciocchi said this Monday (11) he expects the electricity bill of Brazilians to pass the entire year of 2022 without extra fees to pay for thermal plants.

In the second half of April, Aneel (National Electric Energy Agency) will adopt the so-called green flag on the electricity bill, after eight months of validity of the water scarcity flag, an extraordinary rate to cover the hole generated by the drought in the sector.

This extraordinary fee would last until the end of April, but the government decided to bring it to an early end, claiming that the reservoirs were recovered with heavy summer rains and the measures taken by the sector authorities to save water during the 2021 drought.

Ciocchi recalls that the reservoirs in the Southeast and Center-West regions end the rainy season at the best level since 2012. ONS projections indicate that, even with rains similar to those of 2021, they would not lose as much water compared to the current moment.

Therefore, the expectation is that thermal generation is limited to inflexible plants, those that cannot stop, said the executive. These plants have a capacity of around 4,000 MW (megawatts), well below the more than 20,000 MW demanded by thermal plants in the worst moments of the 2021 crisis.

“We will have a very good year, very calm, which will not cause so much headache, so much pain in the pocket”, dsse Chiocchi, in a virtual meeting with the press to talk about the scenario of the sector after the end of the rainy season.

He defended, however, maintaining the contracts for emergency thermal plants contracted by the government at the height of the crisis, which will cost R$ 39 billion over the next five years. These plants were justified at the time as necessary to help with the long-term recovery of the reservoirs.

“When we made the decision [pela contratação] there was a lot of uncertainty. We had two choices: the regret of hiring and the regret of not hiring”, he says. “The right decision, in my view, was to hire”.

Ciocchi argues that the Brazilian electricity sector is recognized for complying with contracts and that it would be harmful to the legal security of the sector to break with the winners of the auction held in October 2021.

“Imagine if we break a contract like this now? What confidence do entrepreneurs, the market in general, have in the electricity sector?”, he asked, saying that these thermal plants can help save more water in headwaters reservoirs of the main rivers in the sector.

He acknowledged that some of these plants may delay the start of operations, scheduled for May, due to difficulties in obtaining environmental licenses. They have, by contract, an additional three months to resolve any pending issues.

Its cost, according to the director-general of the ONS, is not significant for the tariff flags account and, therefore, will not require extra fees.

Ciocchi said that the entry of new generation projects and new transmission lines indicates that 2023 should also be a quiet year for the electricity sector, even with little rain in the dry period of 2022.