ABRACEEL (Brazilian Association of Energy Traders) sent a letter to ANEEL (National Electric Energy Agency) questioning the inclusion of a hydroelectric plant in the operating programs of the electricity sector, which allegedly caused distortions in the formation of energy prices this week.
According to the association, the inclusion of the Foz do Prata hydroelectric plant in the May PMO (Monthly Operation Program) generated a "disproportionate impact on price formation."
Owned by Creal, the 49 MW power plant is under construction on the Prata River, between the municipalities of Veranópolis and Nova Roma do Sul, in the Serra Gaúcha region, and is only expected to become operational in 2030.
According to a Reuters report, which spoke to energy traders on condition of anonymity, the decision by the ONS (National System Operator) to include the plant resulted in an unexpected increase of approximately R$ 80/MWh in the price of energy.
The unpredictability of prices is at the heart of the crisis facing the free energy market. Market participants have been questioning changes to the pricing model, which have resulted in greater volatility and higher price levels.
This scenario has put pressure on the strategies of trading companies, which are facing financial difficulties in honoring contracts. As a consequence, several companies have resorted to judicial reorganization to maintain their operations.
ABRACEEL questioned the ONS (National System Operator) regarding compliance with the governance rules of the electricity sector, which stipulate that the inclusion of expansion projects in the PMO deck should only occur after evaluation by the CMSE (Electricity Sector Monitoring Committee) and with public disclosure.
In response, the ONS stated that the procedure is being followed and that the approval after the PMO was carried out occurred due to a mismatch with the CMSE's ordinary meeting, held at the beginning of each month – therefore, after the program's completion.
For ABRACEEL, however, this practice disrespects the current regulatory hierarchy. "The process reveals a procedural failure on the part of the ONS in relation to governance guidelines," says an excerpt from the letter sent by the association, to which the... Canal Solar had access.
Since the plant is only expected to become operational in 2030, the entity believes there is no urgency to justify relaxing the governance process. According to ABRACEEL, the project could be approved by the CMSE in May and considered only in the June PMO, ensuring greater predictability for stakeholders.
According to CNPE Resolution (No. 01/2004), it is the responsibility of ANEEL (National Electric Energy Agency) oversees the management of input data for the chain of computational models that support operational planning and energy price formation.
We request an immediate inspection of ANEEL Regarding the Operator's actions, the aim is to determine the swift exclusion of the aforementioned plant from the deck until the necessary prior approval by CMSE occurs," the association stated.
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