Is optant still an option for solar energy?

Having been commercially serving integrators across the country for three years, I lost count of how many times they consulted me to find out about the feasibility and legality of using the provisions of the, since then, famous article 100 of the REN 414/2010 (Normative Resolution No. 414/2010) which establishes the criteria for a medium voltage accessor (Group A) to have the benefit of having their billing as a Group B accessor.

Even though he is not a lawyer, it is intrinsic to the commercial consultant working in the world of distributed generation, to understand and discern between the regulatory basics that involve a variety of businesses and need to be duly supported by current standards and laws in the electricity sector.

In general, the great motivation for questioning the application of this article of Resolution 414 of the ANEEL (National Electric Energy Agency) is the possibility of being a mini-generator and not paying contracted demand, since such a charge would reduce the attractiveness of the investment in terms of financial return.

To understand this possibility, below is a partial transcription of this article:

Section VI From the Billing Option Art 100. In a consumer unit connected to primary voltage, the consumer can opt for billing applying the Group B tariff, corresponding to the respective class, and meeting at least one of the following criteria: I - the sum of the transformers' nominal powers is equal to or less than 112,5 kVA; II – the sum of the transformers’ nominal powers is equal to or less than 1.125 kVA, if classified in the rural electrification cooperative subclass; III – the consumer unit is located in a vacation or tourism area whose activity is the operation of hotel or inn services, regardless of the total nominal power of the transformers; or IV – when, in permanent installations for the practice of sporting activities or agricultural exhibition parks, the installed load of the reflectors used to illuminate the locations is equal to or greater than 2/3 (two thirds) of the total installed load.

And where did the problem start?

The problem began when it was questioned that REN 82/2012 (Normative Resolution no. 482/2012) in Article 7 in its section I conflicted with article 100 of 414/2010.

Art. 7 When billing a consumer unit that is part of the electricity compensation system, the following procedures must be observed: I – at least the amount referring to the cost of availability for the consumer in Group B, or the contracted demand for the consumer in Group A, as the case may be, must be charged; 

A user who can opt for billing using the Group B tariff is, logically, a Group A consumer. Therefore, it is understood that a mini-generator that falls within any of the provisions of article 100 would not be charged for contracted demand. and would only pay for the availability cost.

This regulatory vacuum led distributors to make generic analyses, sometimes accepting the condition that an opting B be a mini-generator and sometimes refusing the connection. When refusals occurred, many users resorted to ANEEL, through the SRD (Superintendence of Regulation of Distribution Services) and yet another discomfort began to be generated.

Several letters were issued on this topic and the problem was that each of them had a different position. In some documents, mini-generation was accepted for Group A accessors, opting for billing in B and in others they refused. The agency's justification is that each letter referred to the specific case analyzed and that, therefore, the deliberations could be different. This came from 2017 until June 2020.

Na technical note 0029/2020, published on June 26, 2020, ANEEL brought in a more elaborate and forceful way the argument to, as if definitively, end the questions about the then possibility of an optant B being able to be a mini-generator, including admitting that “… when it was considered that distributors should accept requests to comply with art. 100 of REN no. 414/2010 of distributed mini-generators…” it was a “isolated interpretation of the analysis of other devices [which] disregards important aspects of REN no. 482/2012 and implies some adverse effects”.

In contrast to the claim that the refusal of an opting B can be a mini-generator, which then characterizes a prohibition on this envisaged right, the agency defends itself by arguing that “This is not a prohibition on the right to be included in art. 100 of REN no. 414/2020, but rather criteria for participation in the Compensation System established in REN no. 482/2012”.

Almost unanimously, the queries that were made to me by integrators dealt with projects that fell only under item I of Art.100, which talks about the option for billing with the application of the Group B tariff when the sum of the nominal powers of the transformers is equal or less than 112,5 kVA.

I say this because if we remember that the original text of REN 482/2012 had the limit for microgeneration as a power of 100kW instead of 75kW and that in 2015, with REN 687, it was changed to 75kW in order to align with the provided in REN 414 regarding the limit for low voltage, we can infer that this section is not, in fact, the agency's only and greatest concern.

In the same technical note, the ANEEL addresses items II and III, which as an integral part of art. 100 present criteria for the option of BT billing. Item II speaks of electrification cooperatives that may be B optants if the sum of the transformers does not exceed 112,5 kVA, which is already 10 times the best-known criterion.

In section III, which deals with vacation and tourism areas, there are no limits regarding the power of the transformers. In other words, the agency realizes that there is no possibility of admitting one aspect of the standard and ignoring others. Imagine the impact on the distributors' cash flow if all resorts, large hotels and everyone that falls under items II and III became mini-generators and started to pay the network only with the amount referring to the availability rate of a three-phase standard (100 kWh) .

After this technical note, the ANEEL returned to respond to new questions in this area with the same arguments, reinforcing the adopted position. There were cases where concessionaires, erroneously, began to require billing in Group A even for users who were already opting for B and who requested connection for microgeneration. The same technical note explicitly states:

“However, it is necessary to consider the cases of consumers covered by art. 100 of REN no. 414/2010 and that install microgeneration (power less than 75 kW). The art. 7th of REN 482/2012 establishes an obligation to charge contracted demand only for mini-generators (power greater than 75 kW). Therefore, for microphonegeneration, regardless of the size of the consumer in which it is installed, there is no requirement to charge for the contracted demand. Therefore, users in Group A who choose to bill in Group B, as provided in art. 100 of REN 414/2010, are included in the Compensation System as microphonegenerators.”

It is clear, in the face of so many interpretative conflicts, that the standard will need to go through a review process in this aspect and, one of the issues that remains is the fact that, until this happens, the agency ends up exercising regulation by office and this does not bring legal/regulatory security for players in our market.

Not all bills currently in progress that deal with distributed generation address a resolution to this conflict. In the draft of REN 482, presented to society in October 2019, it is clear that it is not possible to apply the billing option with the application of the Group B tariff for minigeneration plants.

I have still received reports of cases where concessionaires have accepted minigeneration for opting B, but many concessionaires have already adopted the agency's stance as the norm and are no longer accepting it. Given the above, my recommendation is to carefully analyze whether it is worth getting into this fight. If the minigeneration project for your client is only viable with the premise of opting B, then your project is not viable today.