Provisional Measure 1.304/2025, sanctioned by the Federal Government and published this Tuesday (25) In the Official Gazette of the Union (DOU), the final version was accompanied by more than ten vetoes in sections considered crucial by the market.
The cuts affect sensitive issues: from compensation mechanisms for renewable energy generators to changes in the calculation of oil royalties and articles that assigned individual responsibility to public agents for failures in the security of the electrical system.
According to the Ministry of Mines and Energy (MME), the decision to veto these provisions took into account three pillars: avoiding significant tariff impacts, preserving regulatory security, and avoiding operational risks.
The government further justified its decision by stating that some of the sections initially approved by Congress in October had the potential to increase costs for the CDE (Energy Development Account) and, consequently, consumers' electricity bills.
Curtailment and compensation for renewables
The most controversial point was the veto of the mechanism that established mandatory compensation for wind and solar power in cases of curtailment – production cuts caused by operational restrictions on the grid.
The proposal stipulated that whenever the ONS (National System Operator) limited the generation of a renewable energy plant, the company would be fully compensated for all the energy not injected into the system.
The government projected that the rule could generate an additional cost of billions of reais in the CDE (Energy Development Fund), an amount that would be passed on to consumers, exacerbating tariff pressures in an election year.
Oil royalties
Another impactful veto affected the provision that altered the basis for calculating oil royalties, changing the way the financial compensation paid by oil companies is determined.
The proposal approved by Congress stipulated that the value would be determined based on international quotations, but the Government understood that this would generate legal uncertainty and the risk of litigation.
"Using quotations from international agencies to form an index for the payment of oil revenues introduces uncertainty for government collection, since these quotations do not reflect the values and physical-chemical characteristics of the oil streams produced in the country," the Union reported.
Other relevant vetoes
In addition to the more well-known topics, the enactment of Provisional Measure 1.304 blocked other provisions. In total, the final sum exceeds ten vetoes, with numbers ranging from 13 to 22 depending on the criterion used (entire articles, vetoed paragraphs, or clauses).
The report by Canal Solar chose to use the term "more than ten vetoes" to encompass this scope. Check out some of them below:
Self-production and use of existing plants
The provision that limited new self-production arrangements, including those based on equivalence, to ventures whose commercial operation began after the publication of the provision was vetoed.
The government argued that such a restriction would prevent the use of already installed capacity, increase the cost of energy-intensive projects, and raise costs in the national production chain.
Competitive procedures of ANEEL
Another vetoed section stipulated that the ANEEL The National Electric Energy Agency should define competitive procedures for access to and use of transmission and distribution networks, focusing on affordable tariffs.
According to the Executive branch, assigning this responsibility to the Agency would shift competencies away from the Ministry of Mines and Energy and could undermine strategic guidelines for sectoral planning.
Operational risk sharing
The government also vetoed the article that mandated the creation by ANEEL of risk-sharing mechanisms arising from operational restrictions imposed by systemic needs, but which limited its application only to hydroelectric, wind, and solar power plants that had already been granted licenses.
The rationale was that the device unduly restricts the scope of a potential regulatory solution, preventing its use in other types of projects.
Migration of power plants to the distributed generation (DG) regime.
The possibility of existing plants reclassifying themselves as MMGD (micro or mini-distributed generation) was also vetoed. According to the government, allowing this migration without any reciprocal obligations would create undue privilege and distort the Legal Framework for Distributed Generation, established through Law 14.300/2022.
isolated systems
The rule stipulating that all energy supply in Isolated Systems should be contracted exclusively through public tenders conducted by local distributors was vetoed. According to the Government, the proposal would stifle the supply model, could generate inefficiencies, and conflict with federal planning guidelines.
Regulated competition in network access
Another important veto affected the provision that allowed the definition of access to and use of transmission and distribution networks through competitive procedures regulated by... ANEELThe Executive branch stated that transferring this authority would not guarantee alignment with the federal government's public policies.
Mandatory investment in R&D by marketers
The article that required energy trading companies to allocate minimum percentages of their net operating revenue to R&D (research and development) and energy efficiency programs has been removed. According to the government, the measure distorted the purpose of the programs and could create asymmetries between agents.
Penalties for willful omission in electrical safety measures.
Also vetoed was the provision for administrative penalties for willful omission without just cause related to contracts necessary to guarantee energy security. The Government cited legal uncertainty and the risk of overlapping competencies, as well as the potential for excessive criminalization of management activities.
Check out all the vetoes of Provisional Measure 1304, in this link.
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