Benefit of REIDI for the distributed generation sector

O REIDI benefit (Special Incentive Regime for Infrastructure Development) is old (Law No. 11,488, of June 15, 2007) and well known by players operating in the centralized energy generation market.

Summarizing what this benefit provides, it basically relieves the asset aimed at country's infrastructure (in the transport, ports, energy, basic sanitation and irrigation sectors) of PIS and COFINS contributions, in relation to goods, materials and services incorporated into the asset, both in domestic and foreign acquisitions.

A doubt that still exists on the part of players in the generation sector is whether this benefit It is also valid for the implementation of distributed micro or mini generation systems.

This article aims to clarify the reasons why ANEEL (National Electric Energy Agency) manifested itself in order to remove the benefit of REIDI for the distributed generation sector.

Public administration acts on the topic

On December 16, 2016, ANEEL provoked the Federal Attorney's Office, through the Memorandum no. 360/2016-SCG/ANEEL, which culminated in the preparation of Opinion No. 00001/2017/PFANEEL/PGF/AGU, which is very well founded, despite the frustration of not being in favor of granting the REIDI benefit for distributed generation provided for in REN 482/2012.

In short, the opinion states that qualification for REIDI is restricted to projects that have been “approved” and that are within the scope of energy, generation, co-generation, transmission and distribution. Furthermore, the opinion states that in the case of distributed generation there is no commercialization of electrical energy, that its consumers cannot be confused with free or special, and that in order to carry out self-production of energy, specific authorizations from the public entity are required.

This opinion was used on other occasions to support documents issued by ANEEL, such as Circular Letter No. 0010/2017-SRD/ANEEL, dated March 22, 2017. Note what it establishes regarding REIDI in the GD :

“9. Therefore, we understand that generating units that have been enabled for REIDI cannot qualify as microgeneration or distributed minigeneration and, therefore, participate in the Electric Energy Compensation System, since these installations were made viable through the enjoyment of a benefit provided due to their original condition, when they were characterized by infrastructure work in the electrical energy sector.

10. It is up to the distributor, therefore, to identify enterprises qualified for REIDI – which intend to fall under REN no. 482/2012 – and deny their adherence to the Electric Energy Compensation System.”

ANEEL was surgical in relation to the limits of its competence, as it does not have the power to decide on tax issues. Under the terms of the letter, the possibility of consumers joining the Electric Energy Compensation System was prohibited if they had obtained the benefit of REIDI to implement distributed micro or mini generation assets.

Furthermore, it left the responsibility to the distributor to carry out this inspection, which is a complex mission and requires technical knowledge that distributors, as a rule, do not have.

In the records of administrative process no. 48500.004330/2017-6, which had as one of the interested parties ABRAPCH (Brazilian Association for the Promotion of Small Hydroelectric Power Plants), by the illustrious director of ANEEL at the time, Reive Barros dos Santos, also used of the opinion to substantiate his vote, which, on the merits, denied the inclusion of micro and mini-generation units distributed in REIDI.

The Department of Grants of Concessions, Permissions and Authorizations, of the MME, questioned the General Legal Consultancy of the Union, about the possibility of classifying a distributed minigeneration project in REIDI, but in response issued Opinion No. 00250/2017/CONJURMME/ CGU/AGU, of March 29, 2017, understanding that “The generation of energy through distributed generation mining, under the terms of REN No. 482/2012, as it currently stands, is incompatible with the tax benefits provided by REIDI”.

Conclusion

As a counterpoint to all the arguments brought in the documents mentioned above, it is also important to remember that participants in the Electric Energy Compensation System, especially distributed minigeneration, are obliged, under the terms of Resolution 482, to participate financially in the costs of any necessary improvements and reinforcements in the distribution system.

Energy self-producers, despite obtaining a grant provided for in the Ordinance of Ministry of Mines and Energy No. 310/2013, from a macro point of view, they are not acting differently from “prosumers”, as both generate energy for themselves, with the only difference being the installed power in energy generation assets, which for distributed generation is limited to 5 MW.

If, on the one hand, ANEEL prevented concessions from being required in distributed generation and that contracts for use and connection to the grid as a generator were required from prosumers, these were replaced by other mechanisms, and even if absent, they can be understood by law as tacit authorizations, precisely to reduce bureaucracy throughout the energy evolution that will take place, whether with the benefit of REIDI or without it.

In any case, the discussion is not easy, and at least to date, we are unaware that this issue is being discussed in the judiciary by any prosumer interested in obtaining the benefit of REIDI to implement distributed micro or mini generation systems, within the scope of the resolution 482.