TCU receives request to suspend emergency thermal plants

The contracting of emergency gas-fired thermal plants to avoid rationing needs to be suspended, as it violates public administration principles and imposes expensive, polluting and unnecessary energy on consumers.

This argument is contained in a complaint filed this Thursday (11) by Idec (Brazilian Institute for Consumer Protection) at the TCU (Union Court of Auditors).

Gas-fired thermal plants were also questioned during a hearing held at the Chamber’s Mines and Energy Committee. The meeting, also this Thursday, was organized to discuss the increase in Ceará’s electricity bill, but ended up being used as a forum for debate on alternatives to stop the sharp increase in the electricity bill in 2022.

There is a legislative decree being processed in the House, on an urgent basis, which seeks to suspend the energy readjustment in Ceará this year, but which can be extended to other states.

The natural gas thermal plants questioned by Idec in the TCU, according to estimates, will increase the electricity bill by 4.5%. Under the contract, they must operate from 2022 to 2025 to meet demand in the Southeast, Midwest and South, at an estimated cost of around R$40 billion.

In all, there are 14 plants designed to preserve the use of hydroelectric plants, which should have come into operation on May 1, but there are delays in the projects, as published by Sheet.

These gas-fired thermal plants were contracted in October 2021, when the drought had reduced the supply of water for hydroelectric generation. As there was a rush, they were placed within a special regime, called PCS (Simplified Competitive Procedure). The entire process was authorized by the Chamber of Exceptional Rules for Hydropower Management, the body responsible for managing the crisis.

Idec, however, argues with the TCU that the projects should not even have been contracted, that the procedure adopted is questionable and that, now, they make the electricity bill more expensive, while polluting the environment.

“The Ministry of Mines and Energy wasted time denying that there was a water crisis, it took time to talk about the need to save energy and then stopped negotiating the reduction of consumption with large companies”, says the coordinator of the Energy and Sustainability Program at Idec , Anton Schwyter.

“If they are not suspended, these thermal plants will remain operating until 2055, raising the electricity bill, emitting more greenhouse gas, which in turn, exacerbates climate change, the same climate change that generated drought and the water crisis. It’s an unsustainable cycle.”

Iema (Energy and Environment Institute) calculations show that the activation of thermal plants will be responsible for the emission of 11.6 million tons of carbon dioxide by 2025. This means that, per year, only these plants will emit the equivalent of 6.3 % of total emissions from the electricity sector in 2020.

The emergency contracting also allowed the flexibility of environmental licenses so that the plants could be erected more quickly.

wanted by Sheetthe MME press office said that the ministry has not yet been informed about the Idec procedure, but highlighted that it “has taken all measures to guarantee the supply of electricity in a timely manner and at the lowest possible cost for the consumer.”

COMMISSION DISCUSS ICMS AND SUBSIDIES CUT

In addition to the suspension of emergency gas thermal plants, other procedures are on the radar of parliamentarians and experts in the energy sector to reduce the exponential increase in the electricity bill.

During the hearing at the Chamber’s Mines and Energy Committee on Thursday, it was argued that states should consider reducing ICMS on the electricity bill. The topic was addressed by several participants, with emphasis on the analysis by the representative of Aneel (National Electric Energy Agency).

According to the agency’s Tariff Management superintendent, Davi Antunes Lima, ICMS accounts for 21% of the total tariff. “A easing of the rate could reduce the cost to the consumer by up to 5%”, said Lima.

Another alternative would be to expand the use of tax credits generated by improper collections of PIS/Cofins already guaranteed in court. About R$ 12 billion were used to reduce tariffs in several distributors, but there is more than R$ 40 billion that can still be used, in a staggered way, to hold the readjustments.

The issue will be discussed at another hearing, this time at the Senate Infrastructure Committee, on May 17. The meeting is an initiative of Senator Fábio Garcia (União-MT), who tries to guarantee the integrality of the credits to lower the electricity bill. As they were obtained in court by the distributors, companies are currently trying to keep part of the resources.

Marcos Madeira, president of Abradee, which represents energy distributors, also reinforced the need to review other items of the total cost of energy, such as the high volume of subsidies, to promote structural change.

“Distributors are the end of the chain, the consequences, not the causes,” he said. “It is necessary to look at how the electricity bill is composed, as 49% of the total are subsidies and taxes that need to be reviewed.”

There is a strong impact, for example, from the fund called CDE (Energy Development Account). He finances items such as universal access to energy with Luz para Todos; the low-income social tariff, subsidies for coal-fired thermal plants and fuel from thermal plants that are not in the system. This year, the CDE will cost BRL 32 billion, 21% more than in 2021.

“It is important to discuss whether it would be the case to transfer this account to the National Treasury, treating these sectoral charges within a public policy”, said Mario Menel, president of Fase (Forum of Electric Sector Associations), which brings together all members of the energy chain, from generation to consumption.

The hearing was requested by Deputy Danilo Forte (União Brasil-CE) within the process of processing the Draft Legislative Decree 94/22. Presented by deputy Domingos Neto (PSD-CE), it provides for the suspension of the increase of more than 24% in the Enel Ceará electricity bill, and can be extended to other platforms that have a high above two digits in the readjustment.

Even MME tries to avoid the suspension of the charge. The deputy secretary of Electric Energy of the ministry, Domingos Romeu Andreatta, reinforced at the hearing that not giving the adjustment foreseen in the contract would harm the financial balance of the distributors and would have a huge impact on the business sector, being interpreted by investors as an increase in regulatory risk in Brazil .