Electricity bill: Senate may approve R$88 billion in subsidies – 09/13/2023 – Market

Subsidies for solar energy and Small Hydroelectric Plants, under discussion in the Senate, could generate an additional cost for energy consumers of R$4 billion per year, over the next 22 years, according to a survey carried out by the National Energy Consumers Front.

According to the entity, there will be R$238 billion in subsidies, which is the sum of the approximately R$150 billion already foreseen with the additional R$88 billion that the senators can add, which will increase the electricity bill by 5. 4% in the period.

The extension of subsidies was proposed in PL (Bill) 2,703/2022, authored by deputy Celso Russomanno (Republicanos-SP).

Originally, the text dealt with the extension of the deadline to access benefits when installing solar panels in the DG (Distributed Generation) category, which includes micro and mini generation. Interested parties would have an additional 12 months to access discounts provided for in Law 14,300.

An addendum to the proposal, however, granted the same advantages to new hydroelectric plants of up to 50 MW (megawatts) in the Central-West.

Approved urgently in the Chamber, the text is now under the rapporteurship of Senator Otto Alencar (PSD-BA) at the CAE (Economic Affairs Commission).

The expectation was that the PL would be shelved in the House, as senators have been more sensitive in blocking proposals from the Chamber that increase costs for energy consumers. The lobby from the benefiting segments, however, has been very strong, and the PL has started to move forward.

The subsidies provided for in the original law already cost R$6.8 billion per year on the electricity bill. With the additional amount being evaluated in Congress within PL 2,703, the bill rises to R$10.8 billion per year, from 2024 to 2045, for energy consumers.

Around R$1.6 billion would be allocated to subsidies, charged within the CDE (Economic Development Account) which falls on the electricity bill. Another R$1.4 billion, on average, would cover the overcontracting of distributors (the amount could vary more or less, depending on the volume of projects).

Consumers would still have to pay around R$1 billion in taxes per year.

“This volume of subsidies even affects the country’s inflation, because more than 200 million Brazilians, who earn less, are paying subsidies to the 2 million who earn more and do not need this type of help”, says Luiz Eduardo Barata, president of the National Energy Consumers Front.

The official inflation index for August, released this Tuesday (12) by IBGE (Brazilian Institute of Geography and Statistics), was driven precisely by the rise in energy prices.

In a letter sent to senators this Tuesday, the entity explains that subsidies for renewable energy have become meaningless, since projects from these sources are currently profitable.

It also says that, in the case of Distributed Generation, subsidies are equivalent to income transfers. They are paid by consumers without the resources to finance this private generation and benefit consumers with high purchasing power and even large companies that have access to credit to pay for the installation of the panels.

“There is no economic, social or environmental reason for expanding subsidies to a modality that has already prospered, exceeding its own growth projections, thanks to the benefits already granted”, says the letter sent to senators.

Distributed micro and minigeneration already total 23.5 GW (Gigawatts) installed, more than two Itaipu plants, according to a sectoral balance released this Tuesday by Aneel (National Electric Energy Agency).

In 2023 alone, 446.9 thousand systems were installed across the country, with an offer of 5.3 GW.

When he presented the proposal, Russomanno argued that DG generators would have been harmed by Aneel’s delay in regulating the law. It would also be an alternative for those who were harmed by distributors who were taking too long to make the connection, putting the granting of the benefits provided for by law at risk.

Aneel and the distributors have always refuted the argument, claiming that the benefits were guaranteed for those who entered within the legal deadline.

In this case, the extension, experts say, would favor those looking for advantages to enter the DG farm business.

This segment offers cheaper energy to large retail chains, small businesses, banks, among other businesses, taking advantage of discounts supported mainly by the electricity bills of residential consumers.