Provisional Measure 1118/2022 brings major changes to the electricity sector with impacts on photovoltaic solar energy projects and other renewable energy.
This is because MP 1118/2022 postpones the deadline for entry into operation of enterprises that wish to maintain the TUSD/TUST discount. The term, which was previously 48 months, will now be 72 months.
Does the matter affect GC (centralized generation) projects that operate in the ACR (Regulated Contracting Environment) and ACL (Free Contracting Environment), but does it not affect distributed generation projects?
And why does it not affect distributed generation? Because only companies that operate in centralized generation had the possibility of obtaining a discount on TUST/TUSD (Art. 26 of Law 9427).
As a result, generating plants that requested a grant by March 2nd of this year will be able to start operating all their generating units within a period of up to 72 months, counting from the date of issuance of the grant. In this way, these enterprises will have the right to discount transmission and distribution tariffs.
However, Luiza Melcop, partner at Cortez Pimentel Advogados, highlights that in order to make this postponement, the Provisional Measure determines that the agent responsible for the undertaking provides a guarantee of faithful compliance, in accordance with the regulations of the ANEEL and calculated according to the installed capacity of the project.
“The impact of the rule will be felt mainly by photovoltaic plants, which do not usually provide a guarantee of faithful compliance. However, for wind and water sources, the measure will be entirely beneficial, given that these projects already have the obligation to provide the guarantee', explains Luiza.
The second benefit brought by MP 1118/2022 for renewables is the stability brought to the TUST or TUSD of the projects for the entire period of the concession and updated by the IAT (Transmission Update Index). In other words, the floating tariff methodology proposed by ANEEL (National Electric Energy Agency) in Submodule 9.4 of PRORET (Resolution 1024/2022) will not apply.
“This is because resolution 1024/2022 provided for the methodology for calculating the floating tariff envelope. According to the methodology, the TUST would not be stabilized and would be calculated according to the connection bus of the generating plant, readjusted annually by the IAT and the transmission expansion risk index (Re), whose variance would be 5%”, explains Luiza.
Locational sign
Another point highlighted by the lawyer is that MP 1118/2022 provides that the tariff methodology for intensifying the locational signal must consider the national policy for expanding the electricity matrix, with the reduction of regional inequalities.
“This premise fundamentally alters the studies of ANEEL in Public Consultation No. 39/2021, which indicated that the addition of the locational signal would result in higher TUST values for generating plants connected in the North/Northeast, without deeper impacts on the Southeast/Central-West/South submarkets”, he analyzes.
“Thus, with the approval of the Provisional Measure, it is possible to review this tariff cost allocation matrix within the SIN (National Interconnected System) submarkets”, he adds.
Next Steps
The text of Provisional Measure 1118/2022 must be analyzed by the Senate by September 27th. When evaluating the matter, the Legislative House can approve it without changes, which will mean that the text will be sent to President Jair Bolsonaro for sanction.
If the Senate approves it with changes, the text will be discussed again by the Chamber of Deputies, which will discuss the amendments sent by the Senate.
Answers of 2
Does this Provisional Measure 1118/2022 change the deadlines for those who generate residential photovoltaic energy, too?
Good afternoon, Vivian, how are you? No, only for centralized generation. And why doesn't it affect distributed generation? Because only enterprises that operate in centralized generation were able to obtain the TUST/TUSD discount (Art. 26 of Law 9427).