Between 2010 and 2024, the cost of electricity bills soared in Brazil. According to a survey released this Monday (9) by Abraceel (Brazilian Association of Energy Traders), regulated market rates accumulated an increase of 177% in the period, jumping from R$ 112/MWh to R$ 310/MWh.
The increase is 45% higher than inflation measured by the IPCA (Broad National Consumer Price Index), which was 122% in the same period.
In contrast, consumers in the Free Energy Market — who are free to choose their suppliers and contracting conditions — faced a much more favorable scenario: the long-term price varied only 44%, going from R$102/MWh in 2010 to R$147/MWh. This represents an increase 64% lower than the official inflation.
The data also reveal a growing disparity between the cost of energy for captive consumers (homes and small businesses) and for large consumers in the ACL (Free Contracting Environment).
The study also analyzed the evolution of indicators over a longer period of time, since 2003. In this period, residential electricity bills grew by 269%, while the IPCA rose by 218% and the price on the Mercado Livre by 90%.
Factors that put pressure on the tariff
According to Abraceel, there are several factors that explain the continuous increase in tariffs in the regulated market, such as long-term contracts indexed to inflation; mistaken political decisions and a strong presence of thermal plants in the contracted matrix.
Rodrigo Ferreira, CEO of Abraceel, highlights that contracts indexed for decades — such as those signed with hydroelectric plants that structure the Madeira River — become economically unfavorable over time.
According to him, at the time, the auctions resulted in low prices. However, with inflationary adjustments over the years, these rates now exceed the values practiced on Mercado Livre.
The same is true of Itaipu energy. Even with the investments already amortized, consumers do not see significant reductions in costs, as the tariff continues to incorporate socio-environmental and governmental expenses, since the purchase is compulsory for the regulated market.
“If there were only the Free Energy Market, there would be no other possibility than for Itaipu to offer more competitive energy. However, since there is a regulated market, Itaipu’s tariff incorporates socio-environmental and governmental expenses unrelated to the plant’s costs, since this energy will be compulsorily purchased by regulated consumers,” said the executive.
About the study
The survey compared the weighted average of residential tariffs published by ANEEL (National Electric Energy Agency), including tariff flags, with long-term prices from the Free Market determined by the consultancies Andrade & Canellas and Dcide.
The values of the Free Energy Market also considered mandatory charges paid to the CCEE, such as ESS (System Services), EER (Reserve Energy) and ERCAP (Capacity Reserve).
Finally, the data were cross-referenced with the annual variation of the IPCA, based on the indexes published by the IBGE (Brazilian Institute of Geography and Statistics). See here the complete study of Abraceel.
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An answer
There has been a lot of talk lately about future changes in the rules for supplying energy in the captive market (ACR – Regulated Contracting Environment), where domestic consumers and a large part of commerce and industry are located, who will soon also be able to benefit from the advantages provided to large consumers who currently use the modality applied to the free energy market (ACL – Free Contracting Environment).
This article makes clear the losses incurred by the vast majority of consumers resulting from a market where there is no competition, where regulation carried out in an erroneous manner works against the expected development in the segment, and in order to adjust the negative balance, the account is debited on the weaker side.
I hope that when deciding the rules for change, those responsible for these decisions understand once and for all that for there to be development, all participants must benefit, and that there will no longer be benefits that become privileges for a small portion of consumers while the vast majority bear the brunt of the results of these mistaken decisions.