Itaipu lowers the tariff by 19.5%. For the consumer, the reduction will only be 1%

Itaipu Binacional will reduce the electricity service tariff by 19.5% for the year 2023. The value will go from US$20.75 per kilowatt/hour, which was practiced in 2022, to US$16.71 per kw /h, which takes effect this year. The impact on the Brazilian consumer’s electricity bill, however, will be much smaller than that. It will only be about 1% cheaper than what was being paid. This is because Itaipu supplies 8.6% of the Brazilian market, as clarified by the binational, through its press office

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The new value was approved this Monday (17) at the extraordinary meeting of the Board of Directors of the binational, at the headquarters of the Ministry of Mines and Energy (MME), in Brasília (DF), and in a videoconference with the headquarters of Itaipu in Asunción , in Paraguay.

The reduction is already a result of the settlement of the debt for the construction of the hydroelectric plant, in a total amount of US$ 63.5 billion. The last installment of the financing was paid on February 28 of this year. During this Monday’s meeting, the Brazilian and Paraguayan directors reached a consensus on the Unitary Cost of Electricity Services (CUSE), which is the cost for producing energy at Itaipu. The debt, which has just been settled, was part of this cost. Therefore, with the liquidation, it was possible to reduce the value.

“This agreement represents the mutual respect between Brazil and Paraguay. We reached a binational consensus, with a significant reduction, maintaining Itaipu’s capacity for social, environmental and infrastructure investments, in accordance with the guidelines of President Lula’s government”, highlighted the Brazilian general director of Itaipu, Enio Verri.

The hydroelectric service fee is charged from the purchasing entities, the Brazilian Company of Participations in Nuclear and Binational Energy (ENBPar) and the National Electricity Administration (Ande), from Paraguay. In Brazil, this value is one of the components considered for the definition of the Transfer Tariff, applied to the consumer by the National Electric Energy Agency (Aneel).

Understand how the fee is composed

Itaipu’s Tariff, called Cuse – Unitary Cost of Electricity Services – considers exploration expenses (operation, maintenance and management of the company and socio-environmental projects), the charges of Annex C (such as the payment of royalties), in addition to of loans and financing (among them, the debt for the construction of the plant, which was fully paid in February of this year).

The Transfer Tariff, in Brazil, is formed by the sum of the Cuse, the remuneration paid to Paraguay for the energy transferred, among other components. This value is approved by the National Electric Energy Agency (Aneel) and charged by the Brazilian Company of Participations in Nuclear and Binational Energy (ENBPar) from energy distributors.

Councilors sign term of office

The Board of Directors meeting was the first with the presence of the new board members appointed by President Luiz Inácio Lula da Silva, on April 6th. During the meeting, ministers Alexandre Silveira de Oliveira (Mines and Energy), Fernando Haddad (Finance), Esther Dweck (Management and Innovation in Public Services) and Rui Costa (Casa Civil) and Michele Caputo Neto signed the term of office. The Minister of Foreign Affairs, Ambassador Mauro Vieira, is also a member of the Council, but did not participate in the meeting. A Brazilian adviser has yet to be named.

The Board of Directors is made up of 12 directors, six Brazilians and six Paraguayans, and two representatives of the Ministries of Foreign Affairs, one from each country. The Council meets every two months or in an extraordinary call, such as this Monday (17). The term of office of Brazilian directors lasts until May 16, 2024.