A group of business leaders submitted a document to the federal government entitled "Manifesto of Free Energy Consumers," in which they request changes to the criteria currently used to determine electricity prices in Brazil.
The letter, obtained by the news report of Canal SolarIt also bears the signature of Luiz Eduardo Barata, president of the National Front of Energy Consumers and former president of the Board of Directors of CCEE (Chamber of Electric Energy Commercialization).
In the manifesto, the signatories state that the current model is hindering energy procurement in the short and medium term (up to three years) and putting pressure on the competitiveness of Brazilian industry.
According to them, the parameters currently adopted in computer models artificially increase energy prices, favoring generation agents at the expense of productive sectors.
The discussion is set to take a new turn next Wednesday (13), when the CMSE (Electric Sector Monitoring Committee) will deliberate on maintaining or potentially changing the risk aversion parameters used in the formation of electricity prices.
The decision could have direct repercussions on electricity costs for consumers, industries, and free market players starting as early as 2027.
Currently, energy prices in the country are calculated based on the Newave, Decomp, and Dessem computational models, which take into account variables such as reservoir storage levels, hydrological forecasts, and the load and dispatch of thermal and hydroelectric power plants.
Within this framework, mechanisms such as VMinOp and CVaR define the level of conservatism adopted in the operation of the electrical system. VMinOp establishes minimum storage levels in reservoirs, seeking to reduce the risk of energy deficit at the end of the dry season.
CVaR, on the other hand, functions as a statistical parameter that assigns greater weight to the most critical hydrological scenarios, directly influencing thermoelectric dispatch and water preservation in reservoirs.
In the 2025 and 2026 operating cycles, the so-called CVaR 15/40 pair came into effect, in which the 15% worst hydrological scenarios receive a weight of 40% in the pricing models. This made the model more risk-averse, raising energy prices.
In the document, the business leaders argue that adopting the CVaR 15/30 parameter would be sufficient to guarantee compliance with the reference curves defined by CMSE, without compromising the energy security of the SIN (National Interconnected System). They believe that maintaining the current CVaR 15/40 model will likely exacerbate the distortions already observed in the market.
According to the group, excessive conservatism in pricing models artificially raises the cost of energy, stimulating greater thermal dispatch and putting pressure on mechanisms such as tariff flags. They claim the impact affects both regulated and free market consumers.
"In a context where the system does not exhibit stress compatible with such price signals, this distortion becomes even more evident and worrying," they argue.
Business leaders also argue that maintaining the current parameters promotes an unbalanced redistribution of revenue within the electricity sector.
For them, maintaining excessively conservative parameters implies, in practice, a transfer of wealth that favors uncontracted generating agents, to the detriment of consumers and broader economic development.
Crisis in the sector
Current energy prices and reduced liquidity in the free market are putting pressure on consumers and energy traders, while simultaneously increasing profits for uncontracted generation agents.
In this scenario, some generators have prioritized settling energy sales in the short-term market instead of entering into long-term contracts. This strategy increases profit margins in a high-price environment while simultaneously reducing exposure to the risk of counterparty default.
On the other hand, energy trading companies, especially smaller ones, are facing difficulties in acquiring energy under competitive conditions and maintaining the balance of their portfolios. The deterioration of market conditions has already led some companies to seek judicial reorganization as a way to preserve their operations.
Consumers are also directly impacted by this more volatile environment. With a lower supply of long-term contracts and higher short-term prices, exposure to the spot market increases, compromising one of the main pillars of the free market: cost predictability through the advance contracting of energy at competitive prices.
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