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    After Eletrobras sale, 22 hydroelectric plants will have new concession rules

    June 13, 2022 - CE Noticias Financieras


      While the works for the conclusion of Eletrobras' capitalization process advance, with liquidation scheduled for Tuesday, the company and the government are advancing in the negotiations for the signing of new concession contracts for 22 hydroelectric plants, which will be able to sell energy at market prices, in the Free Trade Environment (ACL).

      As defined by the National Energy Policy Council (CNPE), the value added by the new concessions involves R$ 67 billion. Of this total, R$ 25.3 billion will be paid to the Union, in a single installment, as a bonus for the granting of the new contracts, with a term of 30 years.

      In the new contracts, a good part of the hydroelectric plants will leave the current quota regime - which only remunerates operation and maintenance and in which the hydrological risk is allocated to the consumer - and will move to the independent production regime, giving the company more freedom to commercialize, but also requiring the administration of risks associated with production oscillation due to rainfall. Eletrobras will also have new concession contracts for the Tucuruí, Mascarenhas, Sobradinho and Itumbiara plants.

      According to Broadcast (Grupo Estado's real time news system), the signing of the new contracts may happen as early as next month. With this, within 30 days, the bonus payment to the Union should be made. So far, however, these resources are not foreseen in the Union's Budget for 2022.

      Although the new contracts allow Eletrobras to have a new approach in relation to energy, for commercialization at market prices, this should not occur immediately. The migration will be gradual, to avoid impacts on consumer tariffs, at the rate of 20% per year, starting January 1, 2023.

      In the Tucuruí, Curuá-Una and Mascarenhas hydroelectric plants, the rule is different and foresees the availability of energy as from the signing of the new concession contracts, since these plants never operated under the quota regime.

      Despite the contractual changes foreseen in the Eletrobras Law for the plants, two of them have specific contracts: Sobradinho, in Bahia, and Itumbiara, between Goiás and Minas Gerais. Both have subsidized contracts with large consumers and are prevented by the law itself from selling on the free market the energy foreseen in these contracts.

      Impact on tariffs

      The so-called "decotization" of the plants can have an impact on energy tariffs, since the value of the megawatt-hour currently allocated to the distributor in the form of a quota, at a low cost, that pays for operation and maintenance, will have a market value.

      The CEO of the consulting firm PSR, Luiz Barroso, explains that it is difficult to precise the impact, because the evaluation depends on the hydrology. "In hydrologically bad years, decotization is good, because the consumer will be paying a fixed value for something that he would be paying variable more; in good years, [Energy]can be more expensive, because the generator will put the hydrological risk in the price," he says.

      Still, he argued that the measure is positive for the consumer, since it removes from him the responsibility of assuming a risk. "It is more efficient to put it in the hands of those who know how to manage it, which is the generator," he says.

      If the impact of the decommissioning on tariffs raises doubts, another movement resulting from the new concessions should help contain the increase: the transfer of resources to the Energy Development Account (CDE), a fund that provides resources for the funding of various public policies in the electricity sector.

      As a large part of the resources of this fund comes from the levy on the electricity bill, contributions from other sources attenuate the pressure of the charge on the tariffs of consumers served by distributors, such as residential consumers.

      In total, R$32 billion will be allocated to the sector fund, of which R$5 billion in 2022 - which, according to specialists' calculations, will provide a reduction in tariff adjustments this year of around 2.5 percentage points.

      The signing of the contracts will also dictate when these amounts will be used. In a letter to the National Agency of Electrical Energy (Aneel), the Ministry of Mines and Energy informed that there are prospects that the initial contribution will be made by the end of July.


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