Opinion – Vinicius Torres Freire: Eletrobras’ bad soap opera smothers new electricity bill disaster

Electricity will still be much more expensive and the electricity sector will become even more chaotic. If the electric bill doesn’t increase even more this year, thanks to a crazy decree that Congress wants to pass, it will increase next year and beyond.

Is it because of the privatization of Eletrobras? Also, not necessarily because of privatization itself. It is because of the ruinous work set by the parliamentary regents of Jair Bolsonaro’s mismanagement.

The privatization of Eletrobras has entered the final phase of the TV series. Looks like something important is happening. It has gossip, “emotion”. It had the “decisive” vote by the TCU (Court of Accounts of the Union), which was half-assed (mostly due to the validation of the sales criteria), but it would not prohibit anything, although TCU’s challenges could give rise to a piece of cake in the courts. But there will be a court or other legal turmoil, typical of the last days of any privatization. The nut privatization is only part of the story.

The sale of the company can even lead to chabu. For example, tumbles in US stocks can get in the way. Owners of the money may feel threatened by the (remote) risk of privatization being undermined by a PT government or by interventions by Bolsonaro 2, a mess with a propensity to be even more authoritarian and inept.

The hole, however, is even further down.

The Chamber put on an emergency basis a draft legislative decree that can prevent electricity readjustments, which on average in the country should be around 20% this year.

This Wednesday, Arthur Lira (PP-AL), mayor, archduke of the center and regent of Bolsonaro, gave an ultimatum to the government. If they don’t fix the readjustment, the Chamber takes down the thing.

There would be no raise—now. The energy distributors (sellers to the final consumer) might take the matter to court. Some would have financial problems (such as paying for the energy they buy from generators). Brazil would be even more seen as a banana plantation in which it is risky to invest.

Perhaps the government will cover the hole (making more debt) or try to push the bill to the states (by reducing ICMS, as in fuel). Someone will pay.

Where do these and other huge adjustments come from?

Inflation, in part caused by the dollar, which rose in part because of the mismanagement of the ignorant fool. Also postponed readjustments during the worst of the epidemic and the very high price of emergency energy contracted in 2021, in order to avoid rationing.

Have more. Also because of the gross drop in electricity resale at the worst of the epidemic, distributors were left with holes. In order to close the gap, they took out a loan, half sponsored by the government, which wanted to avoid that such costs were immediately passed on to the consumer. The cost of this loan will appear on the electricity bill, with interest and monetary correction, for five years.

Governing parliamentarians want to avoid the sting of the readjustment in the election year. It will go very wrong.

The government is even thinking of using the money it will receive in the Eletrobras sale process to mitigate the readjustment. In theory, this money would serve to mitigate increases in energy costs that will come with the privatization of the state-owned electric company, apart from the extra bill that lobbyists and Congress put in the privatization law (creating market reserves for the production of expensive energy).

Old rolls wrap themselves in last year’s bullshit, which must be amplified by this year’s nonsense. The bill will come, more salty. Bolsonaro and his regents are about to produce another disaster in the electricity sector.