Opening of the free market for consumers with a load of less than 500 kW

A ANEEL (National Electric Energy Agency) forwarded to the MME (Ministry of Mines and Energy) the Technical Note No. 10/2022–SRM/ANEEL, which presents a study on the regulatory measures necessary to allow the opening of the free market for consumers with a load of less than 500 kW.

In total, the Agency identified 14 items to allow the opening of the free market for these consumers.

The measure meets the MME Ordinance No. 465, of 12/12/2019, which determined that the Agency had until January 31 of this year to present this study.

The Agency's first recommendation is the implementation of consumer clarification and awareness campaigns regarding the migration process and operations in the ACL Free Contracting Environment.

Then the ANEEL indicated that retail suppliers need to have a standard product advertised on the internet, allowing for simulation and comparison of products to ensure consumers make an informed choice.

Another important point that ANEEL raised is that there will be a need for regulation against abuses of market power and access to consumer information, in the case of economic groups that own distributors and marketing agents in the free market.

Furthermore, the study recommends that residential consumer retailers create accessible service channels and disseminate information aimed at enabling consumers to adapt to the new reality. (See below all items presented by ANEEL)

Bernardo Marangon, specialist in electricity markets and director of Exata Energia, evaluates the points presented by the Agency as coherent and analyzes what situation will be similar to that experienced by the Telecommunications sector.

“We can draw a parallel in relation to the world of Telecom, where the customer chooses the company that will deliver the cell phone or internet signal. With this movement in the ACL, the consumer will need to have a closer relationship in relation to energy. Therefore, companies that serve Mercado Livre customers will have to adapt to this new retail reality and provide adequate service,” he comments.

“As it is a new topic, at the beginning we will have a customer learning process, just as we did at Telecom. We will have a more complex product and therefore we will need customers to adapt to this”, adds Marangon.

He also points out that many processes still need to evolve with regard to default, as pointed out by ANEEL. “For example, if a customer defaults on their payments to the energy supplier, there must be a process to disconnect them, just as if the energy supplier defaults on their payments to the CCEE, there must be protection mechanisms for the customer who is below that supplier, because otherwise they run the risk of being disconnected. There are a series of procedures that need to be developed within the CCEE so that adequate service can be provided. The issue is more complex than Telecom, so great care will need to be taken,” he ponders.

new business models

Marangon highlights that this movement in the electricity sector can bring new business opportunities. “What will the future of the electricity sector be like, how will the retail supplier reach this customer? It is important that we try to predict what the new business models will be for this new market. I believe that many opportunities will arise for people, new jobs and new companies”, he analyzes.

What about solar energy?

“The relationship with solar energy will be inevitable, because you will be able to generate and sell your energy, if you choose to do a project larger than your needs. So, solar energy will become even more popular. Perhaps it will be more interesting than the Telecom market, since the consumer will be able to be a supplier by placing equipment in their home that can generate energy and still receive revenue for it. I see this market opening with good eyes and full of opportunities”, he concludes.

Items presented by ANEEL

The study identified 14 items for regulation or improvement, in order to allow the opening of the free market for consumers with a load of less than 500 kW:

1. implementation of consumer clarification and awareness campaigns regarding the migration process and operations in the Free Contracting Environment (ACL);
2. indication for retail suppliers to have a standard product published on the internet, in order to allow the simulation and comparison of reasonably standardized products, in trustworthy environments, which guarantee a conscious choice of the costs, benefits and risks involved;
3. regulation against abuse of market power and access to consumer information, in the case of economic groups that have distributors and marketing agents in the free market;
4. determination for residential consumer suppliers to establish accessible service channels and act as disseminators of information, contributing to empowering consumers to face the new reality;
5. conditions and requirements (criteria, deadlines, need to comply and communicate the exit decision to the distributor, for example) for the migration of regulated consumers to the free trading environment;
6. establish deadlines for customer service and calls from new consumers by suppliers;
7. method of presenting electricity bills to consumers with a load of less than 500 kW, served by the ACL;
8. procedure for migrating consumers with the current electromechanical measurement (definition of the consumer load curve and procedure for dealing with the mismatch between measurement data and accounting processing at the Electric Energy Trading Chamber – CCEE);
9. retail marketing;
10. dismissal of CCEE members;
11. suspension of the supply of consumer units modeled on the CCEE;
12. termination of consumer representation by a retail generator or retail supplier;
13. procedure for cutting off defaulting consumers; and
14. supply by the distributor of consumers disconnected from their supplier in the ACL due to the CCEE supplier being disconnected.

All documents related to the subject are included in the Subsidy Request No. 10/2021 space available on the website. ANEEL. Access the link here.