ANEEL publishes Resolution on criteria for entry, maintenance and exit of agents in the energy market

On April 15, 2022, the Brazilian National Electricity Agency (“ANEEL”) published ANEEL Normative Resolution No. 1.014/2022, which establishes the criteria for the entry, maintenance and exit of agents in the energy market. This is one more of the measures to improve the security of the electricity trading market, as proposed by the Electric Power Trading Chamber (“CCEE”) and prioritized by ANEEL in the Regulatory Agenda for the 2021-2022 biennium. 

The Resolution is the result of Public Consultation No. 51/2021, which received 179 contributions from major associations of the electricity sector, as well as from market agents, resulting in important changes in the recent ANEEL Normative Resolution No. 957 (current Power Trading Agreement), of December 7, 2021, and in the very recent ANEEL Normative Resolution No. 1011 (which deals with the authorization for the trading of electricity), dated March 29, 2022. 

Among the amendments, we highlight the following innovations: 

 

Entry Criteria 

  • Definition of types of traders 
  • “Type 1” (large size): no limitation for registering sales amounts in the CCEE’s Accounting and Settlement System, with net equity of, at least, BRL 10 million;  
  • “Type 2” (small size): limited to monthly registration of sales amounts up to 30 aMW in the CCEE’s Accounting and Settlement System. 
  • To obtain authorization from ANEEL to trade, the applicants must present a minimum share capital of BRL 2 million; 
  • During the process of granting authorization to trade before ANEEL, the CCEE will, as a directive for this process, submit to ANEEL an indicative and non-binding opinion with technical and legal analysis, including the evaluation of the applicants in relation to participation in other trading companies and any debts of agents or former agents that belong to the same economic group as the applicants; 
  • If the agent wishes to negotiate sales amounts higher than 30 aMW per month, it must prove to the CCEE that it has a minimum net equity of BRL 10 million; 
  • Transition Rule: the current procedure will apply until April 30, 2023. From that date on, the new criteria will apply. 

 

Maintenance Requirements 

  • For a trader to remain classified as Type 1 (large), the agent must prove annually to the CCEE that it has a minimum net equity of BRL 10 million; 
  • The following are cases that may lead to the revocation of authorization: the occurrence of simulation of the trading activity; the impossibility of the agent to carry out power trading; the use of the authorization exclusively for purposes other than trading; and the failure to send the information required by the CCEE’s Monitoring area; 
  • Traders with outdated registrations will have their access to CCEE’s computer systems restricted; 
  • According to the new Resolution, prior validation of the transaction information before CCEE and ANEEL will be required for operations to amend the corporate control of traders, which previously were not subject to ANEEL’s prior or a posteriori control; 
  • Transition Rule: the current procedure will apply until April 30, 2023. From that date on, the new criteria will apply.  

 

Exit Requirements 

  • Initiating the disconnection process in the case of adjustment in the volumes of electricity associated with sale or assignment contracts validated by the purchasing party; 
  • The CCEE may render a decision, to the National Electric System Operator (“ONS”) or to the distributors, for the disconnection of generators from the CCEE based on a specific profile, in the event of increased debts in the Short Term Market (MCP); 
  • The CCEE will have up to 60 days to conclude the disconnection procedure, as of the date of default of the corresponding obligation; 
  • The presentation of collateral to CCEE by the settlement may suspend the procedure for disconnection from CCEE until the subsequent financial settlement or new default on obligations; 
  • Transition Rule: the current procedure will be applied until the specific Trading Procedure dealing with operational procedures for disconnection is approved. 

 

The CCEE will have 60 days to send ANEEL the respective Trading Procedures that must be adapted to meet the requirements of the Resolution. In addition, the Resolution will be subject to a Regulatory Results Assessment (“RRA”) after two years of implementation of all amendments, past the transition period.  

 

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Demarest’s Energy team is available to provide further clarification or information on this and other related matters.