EN 
PT_BR 
With collaboration from Ricardo Costa, INEL Regulatory Secretary
On June 23rd, the PL 18/2022 which limits the ICMS charge for fuel, electricity, natural gas, communications and public transport to approximately 17%, by including them in the list of essential and indispensable goods and services.
In this way, ICMS will not apply to transmission, distribution services and sectoral charges linked to electricity operations.
The presidential sanction in PL 18 took place in the same week that ANEEL announced the considerable readjustment in tariff flags, which caused a certain surprise to the energy market, but it is worth clarifying below the role of the tariff flag system in Brazil, which aims to determine the variation in the cost of energy.
Thus, the Tariff Flags, in turn, reflect the variable costs of generating electricity. Depending on the plants used to generate the energy, these costs may be higher or lower.
Before Flags, these cost variations were only passed on in the next adjustment, which could occur up to a year later. With Bandeiras, the energy bill became more transparent and the consumer has information when these costs occur. In summary: the Flags reflect the variation in the cost of energy generation, when it occurs.
read more
https://canalsolar.com.br/icms-sobre-combustiveis-e-energia-qual-o-impacto-no-setor-solar/
When the Flag is green, the hydrological conditions for energy generation are favorable and there is no increase in bills. If conditions are slightly less favorable, the Flag turns yellow and there is an additional charge, proportional to consumption, at the rate of R$ 2.989 for every 100 kWh consumed.
In even more unfavorable conditions, the Flag turns red and the additional charged becomes proportional to consumption at the rate of R$ 6,500 per 100 kWh (or fractions thereof), for the Red Flag – level 1; and at the rate of R$ 9.795 per 100 kWh (or fractions thereof), for the Red Flag – level 2. Current taxes are added to these values.
Now with the approval of PL 18/2022, Brazilians can have relief on their energy bills and consider energy as an essential good, with the ICMS limitation established in this important bill we will have legal and energy security of investment capacity in new clean and renewable energy projects in Brazil.
