Project that revokes the location sign advances in the Senate

PDL 365/22 aims to suspend two ANEEL resolutions, which for many harm solar and wind energy generators in the Northeast
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Vote in the Senate Infrastructure Committee last Tuesday, 10/24. Photo: Jefferson Rudy/Agência Senado

The Senate Infrastructure Committee approved PLD 265/22 (Project Legislative Decree 265/2022) which overturns two resolutions from ANEEL (National Electric Energy Agency) that affect solar and wind energy entrepreneurs in the Northeast. There were 12 votes in favor and two against. The text, which has already been approved by the Chamber of Deputies, now goes to the Constitution and Justice Commission for evaluation.

The PDL is considered controversial because it directly interferes with an ANEEL decision. Authored by deputy Danilo Forte (União-CE), the project wants to suspend Normative Resolutions 1,024 and 1,041, both from 2022, which created the so-called location sign.

O location sign It is a concept that imposes a higher tariff for the Use of the Transmission System (TUST) and Distribution (TUSD) for those who use the wire the most. In other words, ANEEL considered that the calculation of transmission tariffs did not allocate costs correctly between agents.

The effect of this is that the Northeast generators will pay a higher transmission fee, as they are energy exporters to the South and Southeast. Meanwhile, the generators in the South and Southeast would have a lower TUST after the transition cycle that began in 2023 and runs until 2028.

On the other hand, the consumers from the North and Northeast, as they are closer to generation centers, would pay a lower transmission fee, while consumers in the South and Southeast will pay a higher TUST/D.

According to Senator Otto Alencar (PSD-BA), PDL rapporteur, the consequence of this will be the migration of projects and investments between regions.

“The objective of the locational signal is to guide new consumers to install themselves close to the generation and new generators to install themselves close to consumers, in order to minimize the need for investment in transmission. The locational signal should not be applied to encourage the relocation of already established generators and consumers, as this would result in the loss of investments already made in both generation and consumption and transmission, harming affordable tariffs”, he explains in the opinion.

For Senator Cid Gomes (PDT-CE), ANEEL's measure favors income concentration by taking away a source of economic development from the poorest states. “This establishes the worst logic in the world: the incentive to concentrate income. It makes energy generation cheaper in places that already have industry, concentrated economic activity, and jobs. In the poorest places in Brazil, energy generation will be more expensive. It is against any regional development program to promote sustainable energy.”

Senator Luis Carlos Heinze (PP-RS) said he was against the PDL. He argued that overturning the resolutions would only serve the Northeast region, as states in the North and Central-West regions also use transmitted energy and, therefore, will benefit from the new arrangement, in addition to having the potential to explore their own energy generation.

“For us, it is more expensive to bring [energy] from the Northeast than to build wind farms. Energy is generated, produced and consumed there. It’s an advantage to do it in other regions, not just in the Northeast and [continue] paying a toll,” said Heinze.

Senators from the North and Central-West corroborate this view, but voted in favor of the PDL for different reasons. Marcos Rogério (PL-RO) and Alan Rick (União-AC) said they preferred to take the discussion to the CCJ, the project's next stop. Jayme Campos (União-MT) criticized Aneel's practices and stated that it is necessary to put a “cleaning brake” on the agency.

As it is a PDL, after passing through the committees, the final decision will be made by the president of the Senate, Rodrigo Pacheco (DEM-MG).

With information from Agência Senado.

Picture of Wagner Freire
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.

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