The TRF-1 (Federal Regional Court of the 1st Region) revoked, last Thursday, December 18th, the last injunction that still prevented the full financial settlement in the MCP (Short-Term Market) of the electricity sector. The measure ends one of the longest and most complex legal battles involving hydrological risk, known by the acronym GSF, and immediately releases 323,78 million reais held back by court decisions.
The decision was handed down by Judge João Carlos Mayer Soares, the case's rapporteur, who pointed out the harm caused to the public economy by maintaining the injunction and recognized the legitimacy of the... ANEEL (National Electric Energy Agency) to establish regulatory standards in the sector.
According to Alexandre Ramos, president of the Board of Directors of CCEE (Chamber of Electric Energy Commercialization), the outcome represents an important milestone for the sector.
“We are living through a historic moment that will pave the way for the successful opening of the free energy market. For almost a decade, the GSF (Generation Scaling Factor) has been a constant concern, and now we are closing this cycle and opening the doors to a more robust and promising business environment that can safely serve the millions of consumers in the country who will soon have the power to choose their energy supplier,” comments Ramos.
The decision has an immediate effect, and the funds should be included in the financial settlement flow for the month of November, scheduled to be completed in January 2026.
Understand the GSF impasse.
The GSF, or Generation Scaling Factor, represents the difference between the energy that hydroelectric plants commit to delivering and the amount actually generated. This shortfall occurs mainly during periods of drought, such as those recorded between 2010 and 2015, and forces generators to compensate for the missing production by purchasing energy on the market, usually at higher prices.
Faced with accumulated losses, several companies resorted to the courts and obtained injunctions that exempted them from fulfilling part of these compensations. According to CCEE, at its peak, the amounts frozen by these decisions reached approximately R$ 10 billion, compromising the predictability and financial stability of the market.
In recent years, CCEE has coordinated several initiatives to resolve the impasse. In 2025, the entity implemented the GSF Competition Mechanism, an unprecedented renegotiation alternative that allowed companies to negotiate their liabilities through bonds.
The operation raised R$ 1,34 billion, of which R$ 792,59 million was transferred directly to the MCP. The success of the measure resulted in the waiver of the right to legal action by several agents and the consequent revocation of a large number of injunctions.
At the end of the process, only decisions favorable to small hydroelectric power plants, known as PCHs, remained, such as the injunction revoked last Thursday. With the new decision, the cycle of legal challenges regarding the GSF (Generation Scaling Factor) is definitively concluded.
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