Energy Newsletter No. 8 – December 2021

HIGHLIGHTS          NEWS         PUBLIC CONSULTATIONS AND FORUMS         WHAT’S NEXT…

Check out our Energy Newsletter, which gathers information on the main administrative, normative and legal texts related to the regulation of the electricity sector in Brazil, for the month of November.

We are available to help you with any questions and hear your ideas and suggestions on how we can improve even more.
Enjoy reading!

Demarest Energy and Natural Resources Team


HIGHLIGHTS

ANEEL publishes Resolution about Hybrid and Associated Power Plants

On December 6, 2021, ANEEL published Normative Resolution (“REN”) No. 954/2021, which establishes regulatory rules for the implementation of a Hybrid Power Generation Plant (UGH) and associated power plants.

The UGH is a power plant installed from a combination of different power generation sources, with or without different measurements for each power generation source, subject to a single authorization grant.

A power plant classified as an Associate, on the other hand, has two or more installations producing electricity with different power generation sources, with different authorization grants and measurements, which share physically and contractually the infrastructure for connection and use of the transmission system.

The new regulatory framework is yet another of the measures being adopted that will promote the modernization of the electricity sector. The inclusion of UGHs and Associates will allow for greater diversification of the Brazilian electricity matrix with the combination of power generation sources that complement each other, to alleviate the problem of intermittency of primary sources and problems with energy shortages in certain periods of the year.

We present the main highlights of the regulation, according to the Normative Resolutions in force, which were amended to include the new rules:

Amendments to REN 876/2020, on authorization granting procedures for Wind, Photovoltaic, Thermoelectric, and other alternative source power plants:

  • Hybrids or associated with hydraulic power generation technology participating in the Power Reallocation Mechanism (“MRE”): these power plants must have different measurements for each generation source. Energy from sources not listed cannot be allocated to the MRE and the physical guarantee of the technology that does not participate in the MRE cannot be considered for the purposes of the MRE;
  • UGH with wind power generation technology: To obtain the granting of authorization for an UGH that includes wind power generation, the interested party must provide a guarantee of faithful compliance in the amount of 5% of the investment related to the wind project;
  • Expansion of hydroelectric power plants: The hydroelectric projects subject to an authorization grant under the terms of REN 875/2020 may be expanded, generating energy from wind, photovoltaic, thermoelectric, or other alternative sources, and thus will be classified as UGHs.

 

Changes in REN 77/2004, which deals with the Discount on TUST/TUSD:

  • Discount for UGH without individualized measurement by source: In this case, the lowest percentage of discount corresponding to the energy sources considered in the authorization grant will be applied to the Tariffs for the Use of the Electric Power Transmission System (“TUST”), focusing on the production and consumption of energy sold or intended for self-production. If one of the sources is not eligible for the discount, the UGH will also not be eligible;
  • Discount for UGH with individualized measurement by source / for associated plants: (i) the discount percentage in the TUST will be proportional to the energy generated by each source monthly, being applied on the production and consumption of energy sold or destined for self-production, subject to the measurement of injected power limits for each source; (ii) the amount of incentivized energy that can be traded will be the seasonal physical guarantee for the contractual coverage of each source authorized to receive a discount; (iii) if there is no physical guarantee published in a specific act for any source, UGH or Associate, the amount of incentivized energy subject to trading will be set according to the rules established by the Energy Trading Rules.

 

Changes in REN 247/2006, which deals with the trading of energy from power plants with primary sources subject to incentives, with a unit or group of consumer units whose load is equal to or greater than 500 kW

  • If the UGH has one or more power generation sources not covered by §5 of art. 26 of Law No. 9.427/1996, there must be individual metering for the uncovered generation source, in order for the power producer to be able to trade energy with a Special Consumer of energy generated from sources included in the aforementioned legal provision.

 

Amendments to REN 666/2015, which deals with contracting the use of the transmission system

  • CUST: the Contract for the Use of the Transmission System (“CUST”) entered into by power plants, including independent producers or self-producers when the generation is greater than their load, must state, separately, the contracted Transmission System Usage Amounts (“MUST”) and, for each Power Generation Technology, the installed power, and its respective load;
  • Power generation greater than self-load: in this case, the MUST must be unique and calculated according to the value declared by the user, which must be within the limits established by the Power Band defined in its granting act, minus the portions corresponding to loads of each power generation source;
  • New Association Access Opinion: The change in the form of association of the power plants must be preceded by an Access Opinion and will not imply a reduction of the MUST contracted by the previous form of association. The CUST of the previous form of association must be terminated, free of charge, and the new CUST be signed to match the new form of association.

 

Changes in REN 559/2013, regarding the calculation of TUST

  • The calculation for Associates: the TUST will be unique for the associated set and will be established in the monthly calculations of services and transmission charges by the ONS after the signing of the respective CUST;

 

General Rules

  • Association of power plants with CUSTs in force: Temporarily, the formation of the association will be allowed, provided that (i) before forming the association, at least one of the power plant’s contracted CUSTs enters into force after June 30, 2023; (ii) the signature of the CUST resulting from the association occurs until March 31, 2023; and (iii) there is no planned, tendered or authorized transmission work to increase the energy flow cap at the connection point.
  • Entry into force: the regulation enters into force on January 3, 2022.

 

The Energy and Natural Resources team at Demarest Advogados is aware of the new rules and is available to assist you and clarify any queries on the subject.

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MP published with measures to address the financial impacts on the sector arising from the water scarcity situation

On December 13, 2021, Provisional Measure No. 1.078/2021 (“MP”) was published, which provides for measures to address the financial impacts on the electricity sector arising from the water scarcity situation currently facing the country.

We highlight the following measures:

  • The MP will enable the structuring of financial credit operations, using the Energy Development Account (CDE) as a vehicle for their amortization;
  • Consumers in the regulated contracting environment who exercise the option to migrate to the free market after the publication date of the MP must pay a tariff, which is charged in proportion to the consumption of electricity and is related to the remaining costs of financial operations linked to actions dealing with the financial impacts on the electricity sector arising from the water scarcity situation;
  • The Electric Sector Monitoring Committee (CMSE) will be authorized to establish an extraordinary tariff flag to cover exceptional costs arising from water scarcity situations, which will be temporary and duly justified.

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Decree waives Access Information for the Grant Application to ANEEL for Power Generation projects

On December 14, 2021, Decree No. 10.797/2021 was published, which regulates § 1-C of art.26 of Law No. 9.427/1996, a provision which elaborates on the end of the discount on the tariff for the use of the distribution or transmission systems (“TUSD/TUST”), and the deadline for those who wish to enjoy this benefit through the amendment established by Law No. 14.120/2020.

For more information on the topic, please refer to our Client Alert.

House approves Bill on modernization of the electricity sector

On December 14, 2021, the House of Representatives approved Bill No. 1.917/2015, which sets out the modernization of the electricity sector. In the new version:

  • It was decided to maintain the treatment given to discounts on tariffs for the use of the transmission and distribution systems for new hydroelectric generation projects with an installed capacity of up to 30 MW (thirty megawatts), established by §1-D of art. 26 of Law No. 9.427/1996, included by Law No. 14.120/ 2021;
  • It was decided that within 180 days after the rule comes into effect, the breakdown of the amounts corresponding to the purchase of regulated electricity in the electricity bill for any supply voltage, when applicable, will be mandatory. In the previous version, the deadline was until January 1, 2022;
  • Inclusion of a rule on the authorization by the Granting Authority to define the contractual energy coverage to be contracted through a power storage system, according to regulation, to improve the efficiency of the distribution and transmission networks, and modulation of the injection of energy from intermittent sources.

The Bill will now be forwarded to the Federal Senate for analysis.

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House approves Bill that changes rules for Distributed Generation

On December 16, 2021, the House of Representatives approved, in a Deliberative Session, Bill No. 5.829/2019, which institutes the Legal Framework for Distributed Generation. The Bill was published on January 7, 2022 (Bill No. 14.300/2022), with vetos.

The first veto was in article 11, paragraph 3, which related to the division of the power plant into smaller units to fit the power limits for the micro-generation or mini-generation regulatory framework when they are floating photovoltaic generation units. The second veto concerns the classification of mini Distributed Generation (“DGs”) as infrastructure projects, so that they can benefit from credit and incentives regimes, such as the REIDI.

In addition, we have separated below the main measures of the Bill that will go for sanctioning:

  • Consumer units. Contracts signed between the consumer and the distributor to access the micro or mini DG system must be entered into with the individual or legal entity, consortium, cooperative, voluntary condominium or building, or any other form of civil association established for this purpose, indicated as the owner of the consumer unit in which the micro or mini distributed generation will be or is installed at the time of requesting access. The possibility to transfer the ownership is guaranteed before or after the connection of the micro or mini distributed DG system (art. 2, §1);
  • Transfer of Account Ownership. Consumers participating in a consortium, cooperative, voluntary condominiums or buildings or any other form of civil association established for multiple consumer units or shared generation projects, may transfer the ownership of the electricity bills of their consumer units participating in the SCEE to the consumer-generator that owns the consumer unit with micro or mini DG of these projects (art. 3);
  • Prohibition of transfer of specific ownership. The transfer of the ownership or corporate control of the DG unit indicated in the access opinion is prohibited, until an inspection request is made to the distributor (art. 5);
  • Guarantee of faithful compliance (Performance security). Those interested in implementing mini DG projects must provide a guarantee of faithful compliance, of (i) 5% of the investment for plants with an installed capacity greater than 500 kW and less than 1,000 kW; or 5% of the investment for plants with installed power greater than or equal to 1,000 kW.

The presentation of a guarantee is waived for micro or mini DG plants that are part of the distributed generation framework through the constitution of a consortium or cooperative and that are part of the multiple consumer units modality.

Projects with an installed capacity greater than 500 kW and which have an access certificate valid on the date of publication of the Law must present the guarantees of faithful compliance within 90 daysof publication of the Law. This requirement will be waived if a contract is signed with the distributor within 90 days of the publication of the Law. If these prerequisites are not met, the access opinion may be canceled.

  • Valuation of costs and benefits. It will be the responsibility of the National Energy Policy Council (“CNPE”) to establish the guidelines for valuation of the costs and benefits of the micro or mini DG within 6 (six) months of publication of the Law, and within 18 months for the benefit valuation calculations to be made by ANEEL (art. 17, §§1 and 2);
  • The Energy Development Account (“CDE”) will temporarily fund the tariff components not associated with the cost of energy and not remunerated by the consumer-generator, levied on the electricity compensated by the consumer units participating in the SCEE (art. 25);
  • Transition period. A transition period for the rules was established to be until December 31, 2045, except for beneficiary units existing on the date of publication of the Law; or for those who file requests for access to the distributor within 12 months from the publication of the Bill (art. 26, caput);
  • Deadline for energy injection. Projects that file a request for access to the distributor within 12 months from the publication of the Law must inject energy (art. 26, §3):
    • In up to 120 days for distributed microgenerators, regardless of the source;
    • In up to 12 months for mini solar source generators; and
    • In up to 30 months for mini generators from other sources.
  • Tariff components. All tariff components defined only on the positive difference between the amount consumed and the sum of injected electricity will be applied to the billing of the existing units (art. 26, §1, I).
  • Billing – Group A. For consumers with mini-generation in Group A, billing must be carried out per the rules applicable to consumer units of the same voltage level until the distributor’s tariff review after the publication of the Law (art. 26, §1, II, a);
  • Billing from other units.

The energy billing of units participating in the SCEE not covered by art. 26 of the Bill must consider the incidence on all active power offset of tariff components percentages related to the remuneration of the distribution service assets, the regulatory reintegration (depreciation) quota of distribution assets and the cost of operation and maintenance of the distribution service in the following ranges:

  • 15% as of 2023;
  • 30% as of 2024;
  • 45% as of 2025;
  • 60% as of 2026;
  • 75% as of 2027;
  • 90% as of 2028;
  • As of 2029, the units participating in the SCEE will be subject to the tariff rules established by ANEEL for consumer units with micro or mini DG.

For mini DG units above 500 kW from a non-dispatchable source in the remote self-consumption modality or in the shared generation modality, in which a single holder has 25% or more of the share of the electricity surplus, the energy billing of the units participating in the SCEE should include, by 2028, the incidence of:

  • 100% of the tariff components related to the remuneration of the distribution service assets, the regulatory reintegration (depreciation) quota of the distribution assets, and the operation and maintenance cost of the distribution service;
  • 40% of the tariff components related to the use of the transmission systems of the Basic Network, the use of power transformers of the Basic Network with a voltage of less than 230 kV and shared DIT, the use of the distribution systems of other distributors and the connection to transmission or distribution facilities;
  • 100% of Research and Development and Energy Efficiency charges (“P&D-EE”) and Power Services Inspection Fee (“TFSEE”); and
  • As of 2029, SCEE participating units will be subject to the tariff rules established by ANEEL for consumer units with micro or mini DG.

For units that file access requests to the distributor between the 13th and 18th month from the date of publication of the Bill, the units participating in the SCEE will only be subject to the tariff rules established by ANEEL for consumer units with micro or mini DG from 2031.

Demarest Advogados’ Energy and Natural Resources team is fully available to answer any questions on the subject.

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ANEEL approves new CCEE Electricity Trading Convention

On December 17, 2021, ANEEL published REN 957/2021, which institutes the new CCEE Electricity Trading Convention. The new Resolution consolidates the normative acts on the Electricity Trading Convention and the Wholesale Energy Market (MAE), discussed in Public Forum No. 21/2021.

During the public forum, only CCEE made contributions to the new rule. The contribution accepted by ANEEL concerns the exclusion of the reference to contractual energy coverage in the regulation, which is no longer mandatory after the publication of Decree No. 8,828/2016, which amended Decree No. 5.163/2004.

The Resolution takes effect on January 3, 2022 and will repeal the following acts:

 

 ACT REPEALED CONTENTS
REN 249/1998 Establishes the conditions for the participation of agents in the Wholesale Electric Energy Market (MAE) and guidelines for establishing the Energy Reallocation Mechanism (MRE).
REN 271/1998 Amends REN 249/1998.
REN 18/1999 Homologates the MAE Agreement.
REN 223/1999 Regulates the sale of unsecured energy to tariff group “A” consumers.
REN 290/2000 Homologates the MAE Rules and sets the guidelines for its gradual implementation.
REN 390/2001 Establishes the procedures for consumers to purchase directly from self-producers and independent producers of electricity, the portion exceeding the consumption target set during the Emergency Electricity Consumption Reduction Program.
REN 73/2002 Establishes the Rules for the Transition in the MAE from the period of self-regulated to the regulated market.
REN 102/2002 Creates the MAE Convention.
REN 103/2002 Authorizes MAE to act according to market rules and procedures established by ANEEL.
REN 447/2002 Establishes the general conditions for the implementation of the treatment to be given to the purchase of Net Contractual Surpluses and the apportionment of Free Energy in the MAE.
REN 552/2002 Establishes the procedures related to the settlement of power purchase and sale operations in the Short-Term Market, within the scope of MAE, as well as addresses financial guarantees and penalties.
REN 610/2002 Amends REN 610/2002.
REN 635/2002 Authorizes MAE to create mechanisms to carry out financial settlements.
REN 91/2003 Establishes the conditions for implementing the power contracting limit for agents participating in the MAE.
REN 237/2003 Determines schedule adjustments for implementing the MAE Rules.
REN 246/2003 Establishes the general conditions for the purchase of power, through a bidding process, in the form of an auction, by the concessionaires of the public distribution service.
REN 329/2003 Amends REN 246/2003.
REN 352/2003 Establishes the conditions for implementing the verification system for power sales contracts registered in the MAE.
REN 688/2003 Approves the Market Rules, components of version 3.5, which incorporates incentives for the efficiency of plants participating in the MRE.
REN 109/2004 Establishes the CCEE Power Trading Convention.
art. 4 of REN 152/2005 Established that changes in the algebraic expressions of the Power Trading Rules that do not represent conceptual or structural changes could be approved by order of the Superintendence of Economic Studies of the Market (SEM).
REN 260/2007 Amends REN 109/2004.
REN 263/2007 Amends REN 109/2004.
REN 348/2009 Amends REN 109/2004.
REN 519/2012 Amends REN 109/2004.
art. 43 of REN 530/2012 Amends REN 109/2004.
arts. 1 to 32 and 34 to 39 of REN 545/2013 Deals with the dismissal of CCEE agents and amends REN 109/2004.
art. 14 of REN 570/2013 Amends REN 109/2004.
REN 571/2013 Establishes criteria and conditions for the accreditation of financial institutions within the scope of the CCEE.
arts. 1 to 31, 31-A, 33, and 34 of REN 622/2014 Provides for financial guarantees and registration of contracts for the purchase and sale of electricity, associated with trading within the scope of the CCEE.
REN 647/2015 Amends REN 545/2013.
art. 5 of REN 649/2015 Amends REN 109/2004.
art. 8 of REN 658/2015 Amends REN 622/2014.
art. 15 of REN 684/2015 Amends REN 109/2004.
REN 701/2016 Establishes the conditions and procedures for monitoring the electricity market.
REN 751/2016 Regulates the approval and inspection procedures for administrative, financial, and tax costs (CAFTs) incurred by the CCEE in the management of sector accounts.
arts. 4, 5, 6, 8, 9, 12, 13 and 14, 22 and 27 of REN 869/2020 Amends REN 552/2002, REN 109/2004, and REN 545/2013.
art. 18 of REN 885/2020 Amends REN 109/2004.
art. 14 of REN 904/2020 Amends REN 109/2004.
Ordinance No. 2.718/2015 Deals with the suspension, until the issuance of the new regulation by ANEEL, of the enforceability of the provisions of art. 30 of REN 622/2014.

 

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NOTÍCIAS

MME publishes guidelines for Auction A-4 of 2022

The Ministry of Mines And Energy (MME) published Ordinance No. 34/GM/MME/2021, with Guidelines for the New Energy Auction A-4, of 2022. The auction is expected to occur on May 27, 2022. The auction aims to contract power generation projects from new hydroelectric, wind, solar photovoltaic, and thermoelectric (biomass) sources.

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ANEEL consolidates rules for monitoring and inspection of plans for universalization of electricity distribution

On December 1, 2021, ANEEL published REN No. 950/2021, which establishes rules for the monitoring and inspection of plans for the universalization of electricity distribution services. The topic “Universalization Plans” provides for the consolidation of 4 normative acts that were in force: REN 223/2003, REN 175/2005, REN 488/2012, and REN 940/2021.

The regulation is a result of Public Consultation No. 33/2021 and also received textual adjustments arising from contributions received in Public Consultation No. 18/2021, which deals with the proposal to consolidate the topical relevance regarding “Rights of consumers and users of the public power distribution service”.

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ANEEL regulates the mandatory updating of registration and automatic registration of beneficiaries of the Social Electricity Tariff (TSEE)

On December 2, 2021, ANEEL published REN No. 953/2021, which amends REN 414/2010 (regulation on General Conditions for the Supply of Electricity) to regulate Law No. 14.203/ 2021, which made mandatory the updating  of registration as well as the automatic registration of beneficiaries of the Social Electricity Tariff (TSEE).

The Regulation will allow, for example, that each family is entitled to the benefit of the TSEE in only one consumer unit and that the distributor is required to consult the Cadúnico (low-income family registry) service and the BPC (disability registry) using the CPF (Individual Taxpayer Registry) and other data provided by the consumer as an access key, being able to cross-reference data with the CadÚnico/BPC databases made available by the Ministry of Citizenship within 10 working days.

The provision will enter into force on January 1, 2022.

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ANEEL amends certain Sub-modules of the Tariff Regulation Procedures (PRORET)

On December 3, 2021, ANEEL published REN No. 955/2021, which amends Sub-modules 4.2, 4.2 A, 4.3, 4.4, 4.4 A, and 6.1 of the Tariff Regulation Procedures (PRORET). The amendments improve rules on the Account for Variation in Values ​​of Items in Parcel A, Energy Over-contracting and Short-Term Market Exposure, Other Financial Components and Rules for Transferring the Prices of Power Purchase Agreements.

The Sub-modules will be subject to a Regulatory Result Assessment until September 1, 2025, which will allow for the assessment of the effects resulting from the regulation changes, taking into account the originally intended objectives and other impacts observed on the market.

In addition, upon approval of the rule, the Reporting Director, Helvio Guerra, decided to commence the second phase of Public Forum No. 25/2019 on the subject, which will last until January 31, 2022, in order to discuss the proposal for the calculation of the effects of the tariffs for monthly and multi-year products of the Surplus Sale Mechanism (MVE), which may also cause changes in PRORET.

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EPE publishes Technical Note with input data for electrical and energy models

The Energy Research Company (EPE) published Technical Note EPE/DEE/011/2021-R1, which deals with obtaining power generation data on wind (onshore and offshore) and photovoltaic (centralized and floating) plants for studies of generation and transmission planning carried out by the EPE. The material points out that the data collection methodology was changed to (i) bifacial gain accounting for centralized photovoltaic plants; (ii) improvement in methodology for floating photovoltaic plants; (iii) inclusion of the year 2020 in the analysis of onshore wind farms; and (iv) use of a 12 MW turbine in the analysis of offshore wind power plants.

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São Paulo Municipality to hire a partner to install a solar farm in a landfill

On December 15, 2021, the Municipal Government of São Paulo published a public consultation to obtain contributions to the draft notice and annexes of a Public-Private Partnership, which will include the implementation, operation, and maintenance of a solar farm at the Bandeirantes Sanitary Landfill, including the management of offsetting electricity credits.

This is another of the measures being adopted by the city as part of the Clean Energy Program, aimed at generating energy in partnership with private parties, to supply the energy demand of consumer units linked to the Municipal Health Department. Interested parties can submit contributions to the documents until January 28, 2022. On January 19, 2022, a public forum on the subject will be held.

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ANEEL approves regulatory agenda for the 2022/2033 biennium

On December 8, 2021, ANEEL published Ordinance No. 6705/2021, which approves ANEEL’s Regulatory Agenda for the 2022/2023 biennium. The agenda has 108 topics related to electricity distribution, transmission, generation, trading and marketing, Economic and Financial Regulation and Accounting for the Electricity Sector, tariffs, R&D and Energy Efficiency, Sector structure or transversal structure (which affects more than one segment), and the organization of ANEEL.

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Privatization of Eletrobras: studies continue, but TCU’s assessment of merit is necessary

On December 15, 2021, the Plenary Session of the Federal Audit Court (TCU) took place, in which the privatization process of Eletrobras was approved. Due to a request for inspection made by Minister Vital do Rêgo, the effectiveness of the concrete measures and signature of the concession contracts will depend on the assessment of the merits of the process when the request for inspection is returned. However, further studies were authorized.

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CCEE sends technical note to ANEEL about financial safeguard structures for the Short Term Market

On December 16, 2021, the CCEE sent to ANEEL the Technical Note NT CCEE 06735/2021, with the proposal of financial safeguard structures for the Short Term Market. According to the CCEE, the adoption of financial safeguard structures aims to fortify the security of the energy trading market, in the interests of providing a commercial environment that is even safer, more reliable and attractive for operations.

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Ordinance of the Ministry of Mines and Energy establishes schedule of auctions for the years 2022 to 2024

On December 20, 2021, Ordinance No. 32/GM/MME/2021 was published, which establishes the estimated schedule for the carrying out of Auctions for the Purchase of Electricity from New Generation Projects, of Auctions for the Purchase of Electricity from Existing Generation Projects, Auctions for Contracting Reserve Capacity and Auctions for Supplying Isolated Systems for the years 2022, 2023 and 2024.

The timeline below summarizes the projected targets:

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MME establishes a timetable for conducting transmission bids

On December 20, 2021, Normative Ordinance No. 33/GM/MME/2021 was published by the Ministry of Mines and Energy, which establishes the schedule for carrying out the Tenders for the Concession of Public Services for Power Transmission.

For the bidding of transmission installations, it is necessary to include power transformers with a primary voltage equal to or greater than 230 kV and secondary and tertiary voltages with less than 230 kV, as well as respective connections and other equipment connected to the tertiary, the execution of the Contract of Use of the Transmission System (CUST) between concessionaires, licensees or authorized representatives for the Public Electricity Distribution Service and the (ONS) within the following terms:

Auction Public Session Deadline for entering into CUST
01/2022 Jun/2022 01.31.2022
02/2022 Dez/2022 07.15.2022
01/2023 Jun/2023 01.31.2023
02/2023 Dez/2023 07.13.2023
01/2024 Jun/2024 01.15.2024
02/2024 Dez/2024 07.15.2024

 

Also, ANEEL will inform the distributors about those Transmission Facilities that are dependent on the CUST for bidding.

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ANEEL establishes procedures for the transfer of public lighting assets

On December 20, 2021, REN 959/2021 was published, which provides for the technical and accounting procedures for the transfer to Municipalities and the Federal District of public lighting assets registered in the Fixed Assets in Service (AIS), of service concessionaires and licensees of public electricity distribution. The rule consolidates the regulations that previously governed the subject: art. 218 of REN 414/2010, REN 480/2012, and REN 587/2013.

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ANEEL publishes criteria for the addition of power generation units from renewable sources in power generation plants in Isolated Systems

On December 20, 2021, ANEEL published REN 961/2021, which establishes criteria for the addition of power generation units from renewable sources in power generation plants in Isolated Systems. The rule provides that, after the granting of authorization, contracting, and installation of a power generation plant resulting from an auction of energy and power in the Isolated Systems, the seller may add a storage system to the existing plant units that generate energy from renewable energy sources, as well as use other fuels, provided that the conditions of the respective Notice, the contracted product and the minimum amounts of power and energy established in the respective CCESI are ensured and if this possibility is provided for in the Notice and/or in the Contract for the Sale of Electricity and Power in Isolated Systems (CCESI).

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ANEEL consolidates rules on the regularization of rural electrification cooperatives

On December 20, 2021, ANEEL published REN 962/2021, which establishes the general conditions for the regularization of rural electrification cooperatives as authorized for the commercialization of power installations intended for the private use of their members. This Resolution consolidates the regulation in force on the subject and repeals REN 12/2002, REN 205/2005, 213/2006, and REN 298/2008.

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ANEEL consolidates rules on electricity distribution

On December 20, 2021, ANEEL published REN 1000/2021, which consolidates the rules on the Provision of Public Electricity Distribution Service, rights, and duties of consumers and other users of the service. It is noteworthy that the new Resolution has 678 articles and repealed 64 acts, such as REN 414/2010, REN 470/2011, and REN 901/2020, all relevant industry regulations on the subject.

As deliberated by ANEEL, the new regulation has several improvements, such as:

  • greater equality in the treatment of users when connecting to the distribution system;
  • treatment of connection specifics in the distribution system;
  • organization of connection deadlines and stages according to the complexity of the connection, instead of establishing deadlines by type of user;
  • simplification of the connection process, with the reduction of interaction steps with the distributor;
  • reduction of the regulatory burden to obtain the connection; and
  • unification of the use contract (CUSD) with the connection contract (CCD) for other users, similarly to what has already been done for consumers.

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Auction Note for Privatization of CEEE-G is published

On December 20, 2021, the State of Rio Grande do Sul published Auction Notice No. 01/2021, with the purpose of selling ordinary and preferred shares representing the capital stock of the State Electricity Generation Company (CEEE-G). The public session of the auction will be held on February 15, 2022.

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ANEEL establishes general conditions for the Electricity Consumer Councils

On December 22, 2021, ANEEL published Normative Resolution No. 963, which establishes the general conditions for the creation, organization, and performance of the Electricity Consumer Councils, and repeals the Normative Resolutions No. 451, of September 27, 2011, No. 715, of April 26, 2016, and No. 820, of June 19, 2018.

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ANEEL establishes rules on cybersecurity policy

On December 22, 2021, ANEEL published Normative Resolution No. 964, which discusses the policy regarding cybersecurity to be adopted by the agents in the electricity sector.

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ANEEL regulates pilot projects involving differentiated billing

On December 22, 2021, ANEEL published Normative Resolution No. 966, which regulates the development and the application of pilot projects involving differentiated billing by concessionaires and licensees of public electricity distribution services.

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ANEEL approves Rules on Power Trading applicable to the Accounting and Liquidation System

On December 23, 2021, ANEEL Normative Resolution No. 960/2021 was published, which approves the Rules on Power Trading applicable to the Accounting and Liquidation System.

The Resolution relies on the ‘Power Penalties’ Module, which presents rules on the power penalties for lack of contractual energy coverage and fines for lack of fuel.

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PUBLIC CONSULTATIONS AND FORUMS

TAKING OF CONTRIBUTIONS (ANEEL) SUBJECT MATTER CONTRIBUTION TERM
No 17/2021 Obtain contributions for changing Sub-Modules 1.2 “Agent Registration”, 1.3 “Votes and Contributions”, 1.4 “Service”, 1.5 “Termination from the CCEE”, 1.6 “Retail Marketing”, 1.7 “Market Monitoring”, 3.2 “Contracts of the Regulated Environment”, 3.3 “Seasonalization and Review of Physical Guarantee Seasonalization”, 3.5 “CCEAR Sales Revenue, 3.8 “Surplus Sales Mechanism”, 5.1 “Accounting and Re-accounting”, 6.2 “Notification and Management of Payment of Penalties and Fines”, 8.1 “MCSD of Existing Energy”, 8.3 “Financial Settlement of MCSD Assignments”, 8.4 “MCSD Ex-post” and 8.5 “MCSD of New Energy” of the Trading Procedures, aiming at adapting to Normative Resolution No. 904/2020, and the Electricity Trading Rules. Until January 07, 2022
No 19/2021 Deepening of the study already carried out with the collection of information on the Assessment of the Regulatory Result of ANEEL’s Organizational Standard No. 40, approved by Normative Resolution No. 798/2017. Until January 20, 2022
No 20/2021 Assess the need for regulatory intervention for the classification of strategic installations of the Brazilian Electric System. Until January 28, 2022
No 21/2021 Contributions for investigating the possible need for regulatory intervention to improve the reliability requirements of transmission facilities. Until February 02, 2022
No. 22/2021 Improvement of rules about the limits of DEC and FEC for distribution companies. Until March 28, 2022
No. 23/2021 Improvement of proposal about assessing the need for regulatory intervention for the possibility of isolating basic network substations by generation facilities . Until February 11, 2022.

 

PUBLIC FORUMS (ANEEL) SUBJECT MATTER SESSION
No 32/2021 Review of REN No. 696/2015, which establishes criteria and actions for the safety of dams supervised by ANEEL, as a result of an amendment to Law No. 12,334/2010, which deals with the National Policy on Safety of Dams. January 30, 2022

 

PUBLIC CONSULTATIONS (ANEEL) SUBJECT MATTER CONTRIBUTION TERM
No 75/2020 2nd Phase – obtain contributions on the Regulatory Impact Analysis aimed at improving the process of Financial Settlement of Charges for the Use of the Transmission System. Until February 12, 2022
No 71/2021 Obtain contributions to improve the draft of the Notice and Annexes of the Transmission Auction No. 1/2022-ANEEL. Until January 10, 2022
No 72/2021 Obtain contributions for the improvement of the proposal for calculating the tariff effects of monthly and multi-year products from the Surplus Sale Mechanism (MVE). Until January 31, 2022
No 73/2021 Obtain contributions for the Regulatory Impact Assessment and the proposal for regulatory improvements related to the sharing of infrastructure between the electricity distribution and telecommunications sectors. Until February 02, 2022
No 74/2021 Obtain contributions on the review of Sub-Modules 2.14, 6.8, 6.16, and 7.11 of the Grid Procedures, related to the requirements, implementation, data collection, and maintenance of the Billing Measurement System (SMF). Until January 24, 2022
No 75/2021 contributions on the Regulatory Impact Analysis (AIR) and on the proposed text to improve the allocation of physical guarantee quotas for energy and power in Angra I and II and in Itaipu for distributors whose market comprises less than 700 GWh/year and component calculation financial support for licensees distributing electricity. Until January 24, 2022
No 78/2021 Obtain contributions on the consolidation of normative acts related to the topical relevance of “Energy Contracting”, in compliance with item 72 of the Regulatory Agenda 2021-2022, Decree No. 10.139/2019, and its subsequent amendments. Until January 31, 2022
No 79/2021 Obtain contributions on the improvement of the proposal for the consolidation of norms related to the Electric System Operation topic. Until January 31, 2022
No 80/2021 Obtain contributions on the improvement of the Demand Response Program, referred to in REN No. 792/2017 Until February 14, 2022
No 81/2021 Improvement of the proposal for the Annual Budget of the Energy Development Account (CDE) 2022. Until January 30, 2022
No 82/2021 Review of REN No. 696/2015, which establishes criteria and safety actions for dams supervised by ANEEL, as a result of the amendment to Law No. 12,334/2010, which deals with the National Dam Safety Policy. Until February 14, 2022
No 83/2021 Contributions on the improvement of the Regulatory Impact Analysis Report and the draft resolution with the proposed revision of REN 697/2015, which regulates the provision and remuneration of ancillary services in the National Interconnected System. Until February 14, 2022
No 84/2021 Regulation of art. 3 of Law No. 14.120/2021, on the sale, transfer to concessionaires, licensees or authorized representatives in the electricity sector or transfer to the management of the Secretariat for Coordination and Governance of Union Assets of the Ministry of Economy – SPU/ME of installations and assets that were taken over and expropriated utilizing resources from the Global Reversion Reserve (RGR), called ‘Federal Goods Under Administration’ (BUSA) Until January 31, 2022

 

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WHAT’S COMING UP…

 

 

May 2022 – New Energy Auction A-4
Notice: ANEEL (to be published)

More information here

 

 

June 2022 – Transmission Auction No. 1/2022 (forecast according to CP 071/2021)
Consisting of 13 lots in the states of Minas Gerais, São Paulo, Espirito Santo, Amapá, Bahia, Pará, Rondônia, Mato Grosso, Pará, Santa Catarina, Mato Grosso do Sul, Amazonas and Acre

Notice: ANEEL (to be published)
More information here

 

 

August 2022 – New Energy Auction A-5 e A-6
Notice: ANEEL (to be published)

More information here

 

 

September 2022 – Auction for Contracting Reserve Capacity, in the form of reserve energy and pursuant to Law No. 14.182/2021
Notice: ANEEL (to be published)

More information here

 

 

October 2022 – Auction for Supply to Isolated Systems
Notice: ANEEL (to be published)

More information here

 

 

November 2022 – Auction for Contracting Reserve Capacity in the form of power
Notice: ANEEL (to be published)

More information here

 

 

December 2022 – Existing Energy Auction “A-1” and “A-2”
Notice: ANEEL (to be published)

More information here

 

 

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This material is for informational purposes only, and should not be used for decision-making purposes. Specific legal advice may be provided by one of our lawyers.