MP 1.304: Schedule for opening the free market is unfeasible, says ABRADEE

On Tuesday (14), the Senate Joint Committee held a public hearing to discuss MP 1.304/2025, whose validity ends on November 7. One of the main points of debate was the schedule for opening the free energy market for low-voltage consumers – a topic that was previously included in MP 1.300 (converted into Law No. 15.235) and was transferred to the current MP.

According to the text, the opening for low voltage would begin in August 2026, covering commercial and industrial consumers, and in December 2027 for other customers, including residential ones.

According to Ricardo Brandão, Director of Regulation at ABRADEE (Brazilian Association of Electric Energy Distributors), the proposed schedule is unfeasible.

"We see that countries that have opened up have taken up to five years. We are proposing to open the market to 6,5 million consumers by August 2026. This timeframe is insufficient for a decree regulating the opening, then for Aneel to regulate it, and also for distributors and retailers to adapt to this process," said the executive.

"In our view, this August 2026 deadline is unfeasible. And a disorganized opening would only impact regulated consumers. It's essential to adjust the schedule to allow for appropriate scaling," he added.

Rodrigo Ferreira, president of ABRACEEL (Brazilian Association of Electric Energy Traders), defended the beginning of the opening in accordance with the original text of MP 1.300.

"It is very important that by August 2026, as provided for in Provisional Measure 1.300, the free market reaches this part of commerce and industry that currently does not have access simply because of the level of tension," he stated.

Ferreira explained that the opening of low voltage depends on three points that need to be approved by the National Congress:

• Creation of a supplier of last resort, which guarantees supply to consumers who are left without a contract in the free market;
• Establishment of the over-contracting charge, to prevent migration costs from falling on distributors;
• Prohibition of discounts on low-voltage wire, in order to contain the increase in CDE (Energy Development Account) subsidies.

For Brandão, these three points are essential for a safe and balanced opening.
"We agree that the overcontracting charge is essential. There's no way to open the market without it. Any migration today leads to overcontracting, which raises tariffs—not only for this reason, but also because the most expensive sources end up with the regulated consumer."

“In addition to the burden, the role of the supplier of last resort is important, as it acts as a protection for the market and, most importantly, for the consumer,” he added.

"Another important element is the prohibition of incentivized source discounts for low-voltage consumers. The PSR calculated that this would triple the value of the CDE subsidy, which currently stands at R$13 billion," said the ABRADEE representative.

Finally, Brandão highlighted the need to modernize tariffs:

"It's essential to provide an hourly price signal. We face curtailment mainly due to a lack of consumption during peak generation periods. On the other hand, in the late afternoon, we have a ramp of over 30 GW—the equivalent of Spain's full load in three hours."

"This price signal is essential not only to modernize tariffs, but also to allow retailers to offer products based on hourly pricing," he concluded.

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