On March 09, 2017 the Auction Notice and respective Exhibits regarding Auction No. 5/2016-ANEEL were published in the Official Gazzete. Such auction is destined to the concession of public service of electric energy transmission lines and is schedule to occur on April 24, 2017 (“Auction”). The Auction Notice was based on the suggestions sent on the Public Hearing No. 92/2016 – ANEEL (“Public Hearing”).
The aforementioned Public Hearing received 22 suggestions from many players of the electric sector. The plurality of the players that sent contributions to National Electric Energy Agency (“ANEEL”) comprises governmental entities, large companies (state-owned and private-owned) of the electric sector and even asset management firms. Thus, the variety of contributors and the diversity of their perspectives was a major differential for the Auction Notice.
The big interest shown by the electric sector players derives from the change of the standard profile of sector’s investors. Eletrobrás, a state-owned company, has no longer the predominant role that it used to have in the new auctions for concessions of transmission lines’ sector, which opens space to other national and international investors. The investment return rate of the transmission segment has almost doubled, satisfying the private market demand. The relation between the Permitted Annual Revenue (“RAP”) and the assets and investments required has passed to a base of approximately 20%.
Among the changes promoted in the Auction Notice, three should be highlighted: (i) the reduction, from 10% to 5%, of the percentage applicable to the calculation of the investment’s accomplishment guarantee; (ii) clearer clauses regarding the possibility of loss of the “proposal guarantees” – which is the amount of 1% on the investment value, estimated by ANEEL regarding every offered lot, to be deposited by the proponents; and (iii) the possibility of reopening the Auction for the lots that have not received valid proposals, in order to enable other proponents to present offers to such lots. .
Another singularity of the next Auction will be the better definition of the calculation method regarding the RAP maximum limit, which was fixed in R$ 2.7 billion. This amount was determined in accordance with the procedure approved by ANEEL’s Board on the 46th Ordinary Public Meeting, which based the Normative Resolution ANEEL No. 749/2016.
The Auction will comprise the offer of 35 lots along 20 states in all regions of the country, totalizing the negotiation of 7,400 km of transmission lines. As a consequence of the Auction, Brazilian government aims at getting investments of approximately R$ 13.1 billion. Therefore, the Auction represents a great opportunity for the energy sector investors and operators.
The great expectations regarding the Auction are also related to the success of the second stage of Transmission Auction No. 13/2015, ended on October, 28, 2016. In this auction, 21 lots were successful negotiated, representing investments in the states of Bahia, Ceará, Goiás, Espiríto Santo, Minas Gerais, Pará, Paraíba, Piauí e Rio Grande do Norte.
This last bid had an average discount of 12.07% in relation to the initial offered price. By this last bid, government has offered 24 lots and only 3 lots were not negotiated. Therefore, Brazilian government raised 92% of the amount initially intended to receive, which represents more R$ 11.6 billion to the Government funds. On the other hand, the RAP of these projects sum the amount of R$ 2.1 billion.
The success of this last transmission auction, in addition to the aforementioned expressive participation of the players in the Public Hearing has raised the interest and the expectations among the players of the energy sector regarding the Auction. It could not be any different. To the great return rates, it should be added the need of investments in the transmission sector. Recent studies show that the Brazil’s energy integrated grid should expand in more than 60% up to the next ten years.
This great moment was already noted by the market, inclusive by investment funds and private finance institutions, interested in financing the new projects in transmission lines. National and international investors are studying and negotiating among themselves the best structure in order to participate in the Auction, especially in the form of a consortium or joint venture structure.
Legislation and Regulation of the Power Sector from February 1st to 28, 2017
Federal Laws:
Law No. 158, dated of February 23rd, 2017: Includes paragraph 14 to the art. 3 of Supplementary Law 063, dated 01.11.1990, to provide for the calculation of the value added of hydroelectric energy for the purpose of distribution of the revenue of the tax collection on the circulation of goods and services belonging to the Municipalities. To access the full text, click here.
MME’s Ordinances:
Ordinance No. 4, dated of January 9th, 2017: Authorizes the complete dismissal of the thermoelectric generating plant named UTE Santarém, installed in the Municipality of Santarém, State of Pará, as of January 2017. To access the full text, click here.
Ordinance No. 23, dated of January 26th, 2017: Revokes art. 4, of MME Ordinances 420, 421, 422, 423, 424 e 425, dated of 08.03.2016. To access the full text, click here.
Ordinance No. 29, dated of January 30th, 2017: Discloses, for Public Consultation, the attached draft of an Interministerial Ordinance stipulating the Program of Targets for Three-Phase Squirrel-Cage Rotor Induction Electric Motors. To access the full text, click here.
Ordinance No. 41, dated of February 7th, 2017: Determines that the Risk Aversion Parameters in the Chain of Computational Models for Supporting the Planning and Programming of the Electroenergetic Operation and Price Formation in the Electric Power Sector be updated, with effect from the first week of May 2017, for the mentioned values. To access the full text, click here.
Ordinance No. 51, dated of February 13th, 2017: Alters the MME Ordinance 123, dated of 04.17.2013; and revokes, on art. 1 of the MME Ordinance 384, dated of 08.18.2015, the part which alters the paragraphs 1, 2 and 4 of art. 5 of the MME Ordinance 123, dated of 04.17.2013. To access the full text, click here.
Ordinance No. 68, dated of February 21st, 2017: Establishes the Market Working Group - Market WG with the objective of defining training actions for the technical staff of the Ministry of Mines and Energy and studying the issues related to supply and demand for electricity, within a determined period. To access the full text, click here.
Aneel’s Ordinances:
Ordinance No. 4.416, dated of January 17th, 2017: Establishes a working group to monitor the fulfillment of the Temporary Performance Plans of the Distribution Service of Amazonas Energia, Ceron, Eletroacre, Cepisa, Ceal, Boa Vista Energia and CEA until the assumption of the service by a new concessionaire to be defined through a bidding process. To access the full text, click here.
Ordinance No. 4.410, dated of January 30th, 2017: Designates the related servers to be part of the Extraordinary Performance Evaluation Committee (CAED); Revokes ANEEL Ordinance 3.809, dated 12.16.2015; and approves the Internal Regulation of the CEAD. To access the full text, click here.
Ordinance No. 4.475, dated of February 21st, 2017: Constitutes the Special Accreditation Committee to act in the area of accreditation of the Superintendence of Generation Services Inspection - SFG, composed of related servants; As well as revokes ANEEL Ordinance 4,144 dated of 08.23.2016. To access the full text, click here.
Ordinance No. 4.476, dated of February 21st, 2017: Delegates to the head of the Superintendence of Generation Services Supervision - SFG, the competences mentioned on the Ordinance; As well as revokes ANEEL Ordinance 951 dated of 06.16.2008. To access the full text, click here.
Ordinance No. 4.477, dated of February 21st, 2017: Delegates to the head of the Superintendence of Electricity Services Inspection of ANEEL, the competences mentioned on the Ordinance, as well as revokes ANEEL Ordinances 268 dated of 05.09.2006, and 460 dated of 11.28.2006. To access the full text, click here.
Aneel’s Resolutions:
Normative Resolution No. 757, dated of February 7th, 2017: Alters the Sub-module 7.2 of the Tariff Regulation Procedures - PRORET, which deals with the Tariff structure of Electric Energy Distribution Concessionaires. To access the full text, click here.
Normative Resolution No. 758, dated of February 7th, 2017: Establishes the general conditions for the incorporation of the Further Transmission Facilities - DIT listed in the Annex to the Fixed Assets by the concessionaires of the public electricity distribution service. To access the full text, click here.
Normative Resolution No. 759, dated of February 7th, 2017: Establishes procedures and requirements pertaining to the System of Measurement for Billing - SMF for installations connected to the distribution system; amends Articles 24 and 25 of ANEEL Normative Resolution 506, dated of 09.04.2012; amends articles 2 and 32 of ANEEL Normative Resolution 414, of 2010, effective as of 06.01.2017; Approves the revision of Module 5 - Systems for Measurement of Procedures for the Distribution of Electric Energy in the National Electrical System - PRODIST, which amends items 3.13.3, 3.7, 6.1.1 and 6.1.2 of Section 5.2; and revokes ANEEL Normative Resolutions 688, dated of 12.01.2015; 718, dated of 05.17.2016, and art. 5 of 724, dated of 05.31.2016. To access the full text, click here.
Normative Resolution No. 760, dated of February 14th, 2017: Approves version 1.4 of Sub-module 6.8 of the Tariff Regulation Procedures - PRORET, which deals with tariff flags. To access the full text, clickhere.
Normative Resolution No. 761, dated of February 21st, 2017: Approves the new version of the Sub-modules 2.1A, 2.2A, 2.5A, 2.7A, 3.1A, 3.2A, 3.3A, 3.4A, 3.4A, 4.2A, 4.4A, 7.1 and 7.2 of the Tariff Regulation Procedures – PRORET, which regulate the calculation of the Annual Tariff Adjustment and the Periodic Tariff Revision of the concessionaires of public electricity distribution services which had their concessions extended. To access the full text, click here.
Ratifying Resolution No. 2.195, dated of January 17th, de 2017: Approves the monthly estimates of the administrative, financial and tax costs to be incurred by the Electric Energy Trading Chamber - CCEE in the management of the Central Resources Account of Tariff Flags for the years 2017 and 2018. To access the full text, click here.
Ratifying Resolution No. 2.196, dated of January 17th, 2017: Approves the monthly estimates of administrative, financial and tax costs to be incurred by the Electric Energy Trading Chamber - CCEE in the management of the Financial Liquidation of Sales Revenue of Angra 1 and 2 generation power stations for the years 2017 and 2018. To access the full text, click here.
Ratifying Resolution No. 2.197, dated of January 17th, 2017: Approves the monthly estimates of the administrative, financial and tax costs to be incurred by the Electric Energy Trading Chamber - CCEE in the management of the Financial Liquidation related to physical energy and power guarantee quotas, for the years 2017 and 2018. To access the full text, click here.
Ratifying Resolution No. 2.198, dated of January 17th, 2017: Approves the monthly estimates of administrative, financial and tax costs to be incurred by the Electric Energy Trading Chamber - CCEE in the management of the Reserve Energy Account - Coner and in the management of the contracts associated with the reserve energy, for the years 2017 and 2018 . To access the full text, click here.
Ratifying Resolution No. 2.199, dated of January 17th, 2017: Rectifies Annexes II and III of ANEEL Ratifying Resolution 2.184 of 11.29.2016. To access the full text, click here.
Ratifying Resolution No. 2.202, dated of February 7th, 2017: Homologates the annual quotas of the Energy Development Account - CDE for the year 2017; as well as amends the ANEEL Ratifying Resolution 2.099, dated of 12.28.2016. To access the full text, click here.
Ratifying Resolution No. 2.203, dated of February 14th, 2017: Establishes the activation ranges and the additional tariff flags, which are provided for in sub-module 6.8 of the Tariff Regulation Procedures - PRORET, effective as of 02.01.2017. To access the full text, click here.
Authorizing Resolution No. 6.160, dated of January 17th, 2017: Authorizes Asja Sabará Services for the Meio Ambiente S.A to explore the Thermoelectric Power Plant Asja Sabará, under the regime of independent production of electric energy, in the city of Sabará, (MG). To access the full text, click here.
Authorizing Resolution No. 6.161, dated of January 17th, 2017: Terminates the concession of the Salto da Barra Hydroelectric Power Plant, on the Apiaí-Guaçu River, in the municipality of Itapeva, (SP), awarded to Maringá Ferro-Liga S.A. To access the full text, click here.
Authorizing Resolution No. 6.162, dated of January 17th, 2017: Terminates the concession of the Cachoeira Hydroelectric Power Plant, in the Cachoeira river, in the municipality of Guarapuava, (PR), granted to Companhia Brasileira de Papel. To access the full text, click here.
Aneel’s Decisions:
Decision No. 152, dated of January 25th, 2017: Declares the termination and recognizes the amounts invested in the realization of the Tariff Flag Campaign. To access the full text, click here.
Decision No. 222 dated of January 25th, 2017: Fixates the value of the quotas cost related to the Incentive Program for Alternative Energy Sources - PROINFA, for March 2017, related to concessionaires of the public electricity transmission service, which serve free consumers and/or self-producers of the basic network of National Interconnected System. To access the full text, click here.
Decision No. 223, dated of January, 25th, 2017: Fixates the value of the quotas related to the charge of the Energy Development Account - CDE, for November 2016, regarding the related concessionaires, which serve free consumers and/or self-producers of the basic network of the National Interconnected System - SIN. To access the full text, click here.
Decision No. 248, dated of January 30th, 2017: Determines to the Electric Energy Trading Chamber - CCEE that, in the Financial Liquidation related to the Hiring of Electric Energy in the Regulated Environment, use for the 2nd Alternative Source Auction – LFA, 1st quarterly calculation, the ENF_DTF acronym. To access the full text, click here.
Decision No. 252, dated of January, 31st, 2017: Clarifies that, when there is no agreement between the accessing party and the transmitter regarding the implementation of the line input module, it is the responsibility of the transmission concessionaire to implement the reinforcement, provided that the deadlines are those used by ANEEL in processes related to the authorization of reinforcements. To access the full text, click here.
Decision No. 255, dated of January 31st, 2017: Sets the green tariff which will be in force in February 2017. To access the full text, click here.
Decision No. 317, dated of February 3rd, 2017: Fixates for the concessionaires of the public electric energy service related on the Decision, the amounts corresponding to the interest on the Reversion Fund, applied in electric systems, related to the year 2017. To access the full text, click here.
Decision No. 370, dated of February 7th, 2017: Approves the proposal of the Electric Energy Trading Chamber - CCEE, to operationalize the ANEEL Decision 3,259, of 2016, rejecting the application of the ANEEL Normative Resolution 622, of 2014, to the selling agents, up to the limit of the amounts that are terminated by the presented mechanisms. To access the full text, click here.
Decision No. 449, dated of February 14th, 2017: Republishes the Public Tender Protocol and the respective Annexes of the ANEEL 002 Auction of 2016 - Stage 2, which is intended for the acquisition of energy and associated power from a selling agent to serve the isolated markets of the Amazonas Energy Distribution, due to changes in parameters and conditions that affect the formulation of proposals; and postpones the date of the public session of the bid, due to the need to reopen the convocation period. To access the full text, click here.
Decision No. 545, dated of February 21st, 2017: Fixates the amounts of the cost quotas for the Incentive Program for Alternative Sources of Electricity - PROINFA, for April 2017, related to the concessionaires of the public electricity transmission service, serving the free consumer and/or self-producers of the National Interconnected System. To access the full text, click here.
Decision No. 546, dated of February 21st, 2017: Fixates the amounts of the quotas related to the charge of the Energy Development Account - CDE, for December 2016, regarding the related concessionaires, which serve free consumers and/or self-producers of the basic network of the National Interconnected System - SIN. To access the full text, click here.
Decision No. 578, dated of February 24th, 2017: Fixates the yellow tariff flag which will be in force in the month of March 2017. To access the full text, click here.
Aneel’s Public Hearings:
Notice Public Hearing No. 01, dated of February 1st, 2017: Announces that the Public Hearing was opened with a contribution period up until March 17th, 2012, in order to obtain subsidies to improve the methodology, in order to define the tariff structure of the licensee for the distribution of electric energy, established in Sub-module 8.3 of the Tariff Regulation Procedures - PRORET. To access the full text, clickhere.
Notice Public Hearing No. 02, dated of February 15th, 2017: Announces that the Public Hearing was opened with a contribution period up until March 16th, 2017, in order to obtain subsidies for the improvement of the Second Periodic Tariff Review of the Cooperativa de Eletrificação Rural da Região de São José do Rio Preto - CERRP. To access the full text, click here.
Notice Public Hearing No. 03, dated of February 15th, 2017: Announces that the Public Hearing was opened with a contribution period up until March 20th, 2012, in order to obtain subsidies for the improvement of the proposal related to the Fourth Periodic Tariff Review of Companhia Energética de Pernambuco - Celpe, effective as of April 29th, 2017, and the definition of the corresponding limits of the continuity indicators of the Equivalent Duration Interruption per Consumer Unit - DEC and Equivalent Frequency of Interruption per Consumer Unit - FEC, for the period from 2018 to 2021. To access the full text, click here.
Notice Public Hearing No. 04, dated of February 15th, 2017: Announces that the Public Hearing was opened, with a contribution period up until March 30th, 2012, in order to obtain subsidies to update the Sub-module 4.4 PRORET (Further financial components) and discussion of the tariff for the hydrological risk forecast. To access the full text, click here.
Notice Public Hearing No. 05, dated of February 15th, 2017: Announces that the Public Hearing was opened, with a contribution period up until March 31st, 2017, in order to obtain subsidies for the improvement of the Second Periodic Tariff Review of Cooperativa de Eletrificação e Desenvolvimento Rural Centro Sul de Sergipe Ltda. - Cercos. To access the full text, click here.
Public Meetings of Aneel’s Board of Directors:
1st Public Meeting of 2017: Held on 01.11.2017. To access the content of the meeting, click here.
2nd Public Meeting of 2017: Held on 01.24.2017. To access the content of the meeting, click here.
3rd Public Meeting of 2017: Held on 01.31.2017. To access the content of the meeting, click here.
4th Public Meeting of 2017: Held on 02.07.2017. To access the content of the meeting, click here.
5th Public Meeting of 2017: Held on 02.14.2017. To access the content of the meeting, click here.
6th Public Meeting of 2017: Held on 02.21.2017. To access the content of the meeting, click here.
Meetings of the Electric Sector Monitoring Committee (CMSE) do MME:
176th Ordinary Meeting: Held on 01.11.2017. To access the content of the meeting, click here.
177th Ordinary Meeting: Held on 02.08.2017. To access the content of the meeting, click here.