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Companies begin discussions with the government to revise the electricity sector model

Associations representing investors from various segments of the electricity industry in Brazil joined forces to convince the government to review the current regu loan credit insurance latory framework of the sector, implemented at the beginning of the Lula government by the then Minister of Mines and Energy, Dilma Rousseff.

The movement in the early stages, according to the Natio loan credit insurance nal Electric Energy Agency (Aneel), comes at a time when the country faces as a result of two years of drought, a supply crisis, with low levels in the hydroelectric reservoirs. In addition, there are several legal fights with businesses and consumers due to the sharp increase in costs resulting from the heavy use of expensive thermal power to avoid rationing.

The purpose of the associations that gather generation agents, distribution and sale of electricity, is that Aneel authorizes the use of resources that companies must aim to research and development projects to hire along with consultancies and universities a major study on possible advances in regulation.




"It is an adjustment in certain parts of the electricity sector model. The model, after all, already has more than ten years, and we feel that some points need to be reviewed, because the industry conditions have changed a lot," he told Reuters President of the Association of Self-producers of Energy (Abiape), Mario Menel.

According Menel chosen interlo loan credit insurance cutor of the companies with the government, issues such as the formation of energy prices in the spot market, the rules for dealing with any generation deficits in hydroelectric, the methodology for setting price caps at auctions and even issues environmental licensing could come under study.

Aneel confirmed to Reuters through the press office, that "the movement exists, but is in very early stage of discussion." The regulator said it therefore not comment on the matter at this time.

The Ministry of Mines and Energy, also in a statement, praised the current regulatory framework, but did not rule out changes.

"The electric sector model, introduced in 2004, was victorious in order to contribute to competitiveness and efficiency projects in power ... despite this, the model was always open to improvements."

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