MP signed by Lula to lower the energy bill will have the opposite effect of increasing the value in the future, points out former Aneel

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For Edvaldo Santana, who was director of the agency, extension of subsidies for renewable power plants will weigh on the tariff paid by the consumer. The association calculates a value of R$4.5 billion more per year. Lula signs a provisional measure that aims to reduce the value of electricity bills; experts see risks of an opposite effect in the future The provisional measure signed by President Luiz Inácio Lula da Silva this Tuesday (9) to lower the value of the electricity bill has provisions that will lead to the opposite effect, according to experts: an increase in the tariff for consumers. This is because the MP establishes, among other points, the extension of the deadline for renewable energy plants — mainly solar and wind — to have full subsidies in wire usage tariffs. Wire usage fee is the amount that plants pay to use the country’s energy transmission network. Today, these renewable sources, as they are less polluting, are encouraged by government subsidies (discounts). And all consumers pay for the subsidies, which are shared in energy tariffs. The problem is that Brazil already produces enough electricity to meet its demand. Extending the deadline tends to generate new plants that, in addition to producing energy that the country does not need (which results in costs), will also impose subsidy costs on consumers. “These projects [das indústrias de energia renovável] come into operation in 4, 5 years. Therefore, until 2029, when they come into operation, the tariff will increase”, stated Edvaldo Santana, former director of the National Electric Energy Agency (Aneel). He then highlighted that the country will not need this surplus energy neither now nor in 2029. “And variable renewables no longer need subsidies, so they wouldn’t need that anymore. Afterwards, you don’t need this energy either now or in 2029. We already have a very large surplus, which will increase when these plants come into operation, as if it were going to perpetuate the surplus”, he added. According to the Brazilian Association of Large Energy Consumers and Free Consumers (Abrace), the cost of extending the subsidy term will be around R$4.5 billion per year – an amount that will be passed on to consumers, over 20 years, which is the term stipulated by the MP. In this sense, Santana states that the government’s measure is similar to the one taken during the administration of former president Dilma Rousseff. At the time, in 2013, Dilma ordered a reduction in tariffs, but the action had the opposite effect of increasing the bill years later “Very similar to Dilma’s provisional measure, because it is the idea of ​​a tariff reduction, but there will be an increase in the future. And with a disadvantage now: because, back then, it was more difficult to know that it was going to cause an increase. Not now. You just need to know how to do the math”, adds Santana. Government calculates a 3.5% reduction. The government, in turn, calculates a 3.5% reduction in energy bills. To achieve the effect of a 3.5% reduction in account, the government intends to advance resources provided for in the Eletrobras privatization law and allocate them to the payment of the “Covid account” and the “water scarcity account”. These accounts are the result of emergency transactions carried out by the distributors to deal with additional costs of pandemic – which generated an economic crisis and an increase in defaults – and water scarcity between 2020 and 2022 – when the lack of rain forced companies to contract more expensive energy. Now, the cost of these loans corresponds to a portion of the tariff adjustments, which increase the electricity bill. The resources foreseen in the MP come from: the Northern regional fund foreseen in the privatization of Eletrobras, which will be used in the tariffs of the states in the region – including Amapá; the advance of around R$ 26 billion from Eletrobras , which would be deposited in the Energy Development Account (CDE). This money will be used to pay off the loans; of mandatory investments in research, development and energy efficiency by distributors. In an interview with journalists on the 3rd, the Minister of Mines and Energy, Alexandre Silveira, said that the advance of R$26 billion in Eletrobras deposits will pay off the distributors’ loans and there will still be an amount left over.

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