Electricity bill explodes and sparks debate on how to reduce price

After two years with measures to hold increases, the electricity bill readjustments will be increased in 2022. Brazilians will pay at least 12% more in the residential tariff in the country’s average, almost 4 percentage points above last year’s adjustment, which was of 8%.

The calculation, made by TR Soluções —a technology company specializing in energy tariffs—does not take into account taxes (which vary from state to state) or the tariff flag—which, if it rises, could raise the cost of electricity even further.

The greatest weight will be felt by residents of the Northeast region: the residential tariff will be 17% more expensive in the year on average, practically ten percentage points above the average adjustment last year, which was 6.9%.

In the readjustments already disclosed, between January and April, the distributors in the region are highlighted in increases. Neoenergia Cosern, in Rio Grande do Norte, rose by over 20%. Coelba, in Bahia, 21%.

High of 24% in Ceará provoked reaction in Congress

The record holder was Enel Ceará, with a readjustment above 24%. The blow was so strong in the state that it triggered an extreme reaction in the Ceará bench in the Chamber and raised a discussion in Congress and in the government, about the need to change the structure of the electricity bill in Brazil.

To force the debate, deputy Domingos Neto (PSD-CE) proposed, and managed to approve, the urgency of processing a PLD (draft legislative decree) to suspend the readjustment in Ceará. There were 410 votes in favor and 11 against. On the occasion, the president of the Chamber, Arthur Lira (PP), said that the project could still include other states with high readjustments.

With the goat in the room, the reaction of the business associations was immediate: the suspension would be a breach of contract, it would increase the Brazil risk and alienate investors. A public hearing at the Chamber’s Mines and Energy Committee, on Thursday (12), brought together representatives from all segments to debate structural solutions.

“If we take it to the plenary, the PLD passes, because no one will have the courage to vote against it in the middle of this crisis and in an election year”, says deputy Vaidon Oliveira (União-CE), rapporteur of the decree.

“But we analyzed the justifications for the increase in Ceará, they are very well explained in almost a thousand pages of a report. We can even take down two sheets of paper, but it is important to talk to the bench of other states first.”

According to Oliveira, there is a certain expectation regarding the readjustments in São Paulo and Minas Gerais, which tend to be equally high and sensitize the deputies of these states. For Minas Gerais, for example, industry sources who prefer not to have their name disclosed project a rise of 20%; São Paulo should have a similar level.

In the TR Soluções survey, Sudeste is second in the ranking of increases in electricity bills, with an average increase of 13%. The region also had a rebound, as the increase was 7.5% last year.

In the North, the increase will be 10% on average, after increasing 8.8% in 2021.

The other regions follow another trend. Increases in the Midwest remain high, but with a small relief. After assimilating a high of 11% last year, the consumer in that region will pay 9.5% of readjustment on average this year.

In the South, however, the retraction is expressive. The electricity bill, on average, will rise 3% this year, after a rise of 8.5% in 2021. These are adjustments well below inflation.

In the survey, TR considers its projections for the year and the value of tariffs already approved by Aneel, the sector’s agency. “Details of the contract, the date on which the adjustment takes place and the variation in the weight of sector charges explain the difference”, says Helder Sousa, Director of Regulation at TR Soluções.

In the case of the South, for example, the readjustments take place at the end of the year: thus, the drought bill was accounted for earlier. Three of the four distributors in the region have new contracts, which have made changes such as changing the index from IGPM to IPCA. Of the 53 distributors in the country, 18 still use the IGPM, which suffers a strong impact when there is an increase in the dollar. Most of them are in the Northeast.

Also pressing this year’s readjustments exceptional items. Among them is the payment of installments of the billionaire loan to pay for the most expensive energy from the thermal plants, in the water crisis of last year. There are also transfers from the so-called Covid account, another loan that paid for the losses of companies with the drop in consumption at the height of the pandemic.

Understand how congressmen want to reduce the price of light

“But what really weighs on the electricity bill are the charges and taxes”, says the president of Abradee, the entity that represents the distributors, Marcos Madureira. These two items account for practically half of the electricity bill.

And it is towards these two items that the debate moves forward.

Consideration is already being given to discussing a project by Paulo Ganime (NOVO-RJ) that proposes to remove the electricity bill from the electricity bill and transfer the CDE (Energy Development Account) to the Budget. This sectoral fund was created in 2002 to fund public policies in the energy area and houses benefits created by Congress itself.

“There’s a lot in the energy bill that shouldn’t be there”, says the director-president of the PSR consultancy, Luiz Augusto Barroso, who also headed the EPE (Energy Research Company), linked to the Ministry of Mines and Energy.

He argues that the CDE bankrolls outdated energies. This is the case of coal-fired thermal plants and fuel oil plants installed in areas that are not connected to the national system, in part because the governors themselves have no interest in forgoing the ICMS charged on fuel.

It also gives subsidy to those who don’t need it. On the list are discounts for rural areas, which include helping with the irrigation bill of large grain producers and exporters, and renewable energy parks, which have already become established businesses and do not need financial assistance.

“The CDE is a bunch of public policies, on which taxes are even charged, raising even more a cost that is already unsustainable”, says the director of Electric Energy at Abrace, which represents large consumers, Victor Iocca.

This year, it is distributing R$ 32 billion in subsidies, 34% more than last year. About R$ 30 billion are paid by the final consumer. “To get an idea of ​​what this is, the value is equivalent to 10% of the entire revenue of the sector”, he says.

According to Aneel itself, the CDE raised Brazil’s electricity bill by 3.4% this year. Southeast, South and Midwest received the biggest impact, up 4.7%.

But 2.4% of the increase in the North and Northeast also comes from there. These regions did not pay CDE and are now in the transition phase, in which the share of the transfer increases year by year.

With regard to taxes, the cogressors put the ICMS in the discussion. During the hearing at the Chamber’s Mines and Energy Commission, it was defended that the states evaluate reducing ICMS on the electricity bill.

According to Aneel’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.

It is also under discussion 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 topic will be debated at the Senate Infrastructure Committee, this Tuesday (17) at the initiative of Senator Fábio Garcia (União-MT). The senator wants to guarantee the entirety of the credits to cut down the electricity bill. As they were obtained in court by the distributors, companies are currently trying to keep part of the resources.

In parallel, private entities try to avoid further increases. The Idec (Brazilian Institute for Consumer Protection) filed a complaint with the TCU (Union Court of Auditors), on Thursday (11), to ask for the suspension of the contract of the 14 gas-fired thermal plants selected by an emergency system, at high prices. , during the drought in 2021.

By estimates, they will raise 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.

Many are behind schedule, but part of their costs have already started to be included in this year’s energy tariffs and are already helping to push up the increase in 2022.