Government opens consultation on renewal of distribution concessions

Among the social contributions is the provision of solar contributions to reduce energy costs in the operation of cisterns and artesian wells

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The Ministry of Mines and Energy opened the Public Consultation 152/2023 which will receive contributions from society and market agents to prepare the criteria that will guide the process of extending 20 energy distribution concessions with contracts expiring between 2025 and 2031.

Interested parties can submit proposals until July 24th, through the MME Public Consultation Portal. After the consultation has concluded and contributions have been collected, the MME will prepare regulations that will govern the conditions for the extension of expiring concessions.

“The idea is that these guidelines also guide new concession contracts, promoting predictability and stability in the electricity sector. The rules will apply to all distributors that fall within the scope of the extension under discussion, with no special treatment for any concessionaire”, says the ministry.

Minister Alexandre Silveira has been making statements that he would demand social compensation from concessionaires. According to Technical Note nº 14/2023, were listed as social conditions:

Public building efficiency programs;
Making investments to improve the efficiency of concession areas with a high level of non-technical losses;
Promotion of the economic and social development of needy populations, through exclusive actions in the electricity sector;
Investment in the modernization of measurement systems, with the aim of providing other technological solutions and other services to users;
Investments in solar panels to reduce electricity costs in the operation of cisterns and artesian wells in communities subject to water insecurity.

The first expiring concessions are from EDP Espírito Santo (2025), Light and Enel RJ (2026). These three have already requested the renewal of their contracts, which does not prevent other concessionaires from submitting a request requesting anticipation of the effects of the extension. The renewal will be carried out for a period of 30 years.

The digitalization of electrical networks and the verification of the quality of the service provided will be fundamental premises to be observed in the renewal process.

One of the suggestions is the possibility of capital contributions from shareholders, with the aim of resolving certain concessions that are not meeting regulatory requirements, but that their shareholders are willing to contribute their own capital to recover indicators.

Wagner Freire

Wagner Freire is a journalist graduated from FMU. He worked as a reporter for Jornal da Energia, Canal Energia and Agência Estado. He has covered the electricity sector since 2011. He has experience in covering events, such as energy auctions, conventions, lectures, fairs, congresses and seminars.