Federal deputies from different parties joined together to question, in the National Congress, the legality of the LRCAP (Capacity Reserve Auction) 2026, held on March 28, which contracted approximately 19 GW of power, predominantly from fossil fuel thermoelectric sources, natural gas and coal-fired power plants, with contracts of up to 15 years and variable costs that can reach R$ 1.40,00 per MWh.
PDL 264/2026 (Legislative Decree Project No. 264/2026, authored by Representative Marcel van Hattem (Novo-RS)), requests the suspension of Ordinances No. 118/2025 and No. 125/2026 of the MME (Ministry of Mines and Energy), which defined the rules of the bidding process.
The project points out flaws in the government's actions, including the absence of a Regulatory Impact Analysis (RIA), overreach of regulatory power, and potential violation of Article 225 of the Federal Constitution, which deals with environmental protection.
Presented on April 24th, the PDL (Draft Legislative Decree) quickly gained momentum. On April 29th, Congressman Lafayette de Andrada (PL-MG), president of FREPEL (Mixed Parliamentary Front for Clean Energy), signed a request asking for the project to be voted on under urgency procedures in the plenary session of the Chamber of Deputies.
"It makes no sense for the government to contract dirty energy, from gas and coal-fired power plants, paying such a high price, when Brazil is one of the richest countries in the world in clean energy, such as solar, wind and hydroelectric. This bill will ultimately be paid by the Brazilian people," stated Congressman Lafayette de Andrada.
According to the authors of the PDL (Draft Law), the model adopted in the LRCAP (Long-Term Energy Contract for the Production and Use of Power Plants) directly impacts the consumer's wallet. The contracts stipulate the payment of a fixed annual revenue even when the plants do not dispatch energy, in addition to variable costs between R$ 800/MWh and R$ 1.400/MWh.
The outcome of the bidding process was also reportedly marked by low competition and concentration in the hands of a few economic groups.
Abrace predicts a 10% increase in electricity bills following the LRCAP results.
Legal questions
PDL 264/2026 It argues that the ordinances:
- They steered the auction toward fossil fuel sources, contradicting the National Energy Policy (Law 9.478/1997) and the National Policy on Climate Change (Law 12.187/2009);
- They were edited without conducting a Regulatory Impact Analysis (RIA), which is mandatory under the Economic Freedom Law (Law 13.874/2019);
- They created a complex legal and economic regime with fixed revenue, remuneration based on availability, and a requirement to contract 70% of gas transportation capacity — without sufficient legal basis;
- They restricted competition by imposing requirements that favor established players in the sector.
With the urgent request filed, PDL 264/2026 can go directly to the Chamber's plenary session, without passing through the thematic committees. Approval will depend on the support of the majority of deputies present at the session.
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