Find out how solar energy cooperatives and consortia work

Solar energy consortiums and cooperatives are forms of distributed energy generation and are currently advancing rapidly in the expansion of solar sources throughout Brazil.

Therefore, this article practically addresses the legal ways of establishing these associative energy generation formats.

Initially, the regulation and definition event on DG (distributed generation) of energy is REN 482 (Normative Resolution nº 482/2012) of ANEEL (National Electric Energy Agency), and subsequent updates, which establishes the general conditions for access of micro and minigeneration to the electrical energy distribution systems and the SCEE (Electrical Energy Compensation System), which allows the consumer to inject surplus energy from their self-production into the local energy distributor's network, generating credits for future use.

Through REN 687 (Normative Resolution nº 687/2015), ANEEL revised the GD rules and brought some important innovations:

1. Increased power to allow generators of up to 5 MW;
2. Credits obtained through self-production are valid for up to 60 months;
3. Introduced the consumer shared generation format, which allows several customers to share energy credits from a single generation facility;
4. Authorized the formation of generating condominiums, where owners of individual consumer units distribute credits between different electricity accounts (Enterprise with Multiple Consumer Units).

In this sense, it seems clear to us that the biggest (and best) innovation brought by REN 687 was the introduction of the concept of shared energy generation, that is, the bringing together of consumers in order to share a larger generating unit and take advantage of the savings of scale possible in this type of arrangement.

Section VII of article 2 of REN 482 regulates the generation model in which a group of individuals or legal entities come together through a consortium or cooperative with the aim of generating energy (emphasis added):

Article 2

(…)

VII – shared generation: characterized by the gathering of consumers, within the same concession or permission area, through a consortium or cooperative, composed of an individual or legal entity, which has a consumer unit with microgeneration or minigeneration distributed in a location different from the consumer units in the which excess energy will be compensated; (Included by REN ANEEL 687, dated 11/24/2015.)

The meeting of different consumers, in the form provided for shared generation, requires that a document be drawn up between them that proves the effective meeting of wills (Consortium of Companies or Consumer Cooperative) and that this document establishes the commitment of solidarity between the participants, to the purposes set out in § 6 of art. 4th, of REN 482.

The legal instrument that proves the solidarity existing between the components of the consortium or cooperative is its Constitutive Act, whether for legal purposes or for the purposes set out in § 6 of art. 4th, of RN 482, being certain that:

1. Consortiums – Consortium Contract; It is
2. Cooperatives – Minutes of the General Assembly of Constitution or Public Instrument of Constitution and the Bylaws.

REN 482 does not define the limits of responsibility of each consortium member or cooperative member before the consortium or cooperative.

In particular, the rule does not allow the distributor to collect any outstanding/unpaid debts from a CU that is part of a consortium or cooperative or to suspend the energy supply of other members.

Consortium of Companies (CNPJs)

When the gathering of consumers and the apportionment of energy credits involve legal entities with different CNPJs (National Register of Legal Entities), for the purposes of shared generation, as provided for in REN 482, the constitution of a consortium must comply with:

6. the procedure provided for in articles 278 and 279 of Law no. 6,404/76 (S/A Law); It is
7. observe the provisions of paragraph III of Article 4 of the Normative Instruction of the Federal Revenue of Brazil no. 1,634/2016, for the purposes of registration with the CNPJ/MF.

Therefore, the definition of consortium in Law 6,404/76, Art. 278 et seq., includes its minimum characteristics:

Art. 278. Companies and any other companies, whether under the same control or not, may form a consortium to carry out a given project, subject to the provisions of this Chapter.

1st The consortium does not have legal personality and the consortium members are only bound under the conditions set out in the respective contract, each responding for its obligations, without the presumption of solidarity.

(…)

Once formed, the Consortium Agreement must be registered with the Commercial Board of the State of the federation of the headquarters, and must comply with Law No. 6,404/76 – Art. 279:

The consortium will be established through a contract approved by the competent company body to authorize the sale of non-current assets, which will include:

I – the designation of the consortium, if any;

II – the enterprise that constitutes the object of the consortium;

III – duration, address and venue;

IV – the definition of the obligations and responsibilities of each consortium company, and the specific benefits;

V – rules on receipt of revenue and sharing of results;

VI – rules on consortium administration, accounting, representation of consortium companies and administration fees, if applicable;

VII – form of deliberation on matters of common interest, with the number of votes that each consortium member has;

VIII – contribution from each consortium member to common expenses, if any.”

Consumer Cooperative (CPFs)

When the meeting of different consumers involves only CPFs (Individuals), REN 482 determines that the instrument for their meeting is the cooperative.

The formation of cooperatives must comply with the general rules set out in the Civil Code (arts. 1,093 to 1,096), as well as the provisions of Law no. 5,764/71 (Cooperatives Law), and, legally, cooperatives are companies of people, with their own legal form and nature and, regardless of their purpose, the Law (sole paragraph of art. 982 of the CC) classifies them as simple societies , not subject to bankruptcy, established to provide services to members (art. 4 of Law nº 5764/76).

The formation of a unique cooperative requires:

1. the selection of members, natural persons, with a minimum number of 20 (twenty) members required to form the company's administration, management body and fiscal council (item II of article 1,094 of the CC), taking into account the need for renewal;
2. Minutes of the General Assembly of Constitution or Public Instrument of Constitution;
3. Bylaws; the general rules set out in the Civil Code (arts. 1,093 to 1,096), as well as the provisions of Law nº 5,764/71, must be observed. Finally, the Cooperative must be registered with the Commercial Board.

The number of members is unlimited, unless it is technically impossible to provide services; Furthermore, the admission of legal entities is exceptionally permitted, in accordance with the following criteria (art. 6 of item I, and art. 29 of Law no. 5,764/71):

1. Legal entities must have as their object the same or related economic activities as natural persons; or
2. Legal entities must be non-profit.

New members are free to join the cooperative, as long as they agree and fulfill the conditions established in the cooperative's statutes and wish to use the services provided.

Before the distributor, the cooperative, to adhere to the compensation system, must present its constituent documents (Acts of Incorporation and/or the Bylaws) accompanied by the Credit Apportionment Form duly approved at the Assembly by the participating Consumers.

Thus, once the Cooperative is formed, it can begin the construction of its own power generation plant or can lease a generating plant from a third Investor.

Tax on Circulation of Goods and Services (ICMS)

The 1988 Constitution provides that ICMS is a tax levied on operations relating to the circulation of goods, based on article 155, item II.

Thus, not only the negotiable nature and existence of the merchandise is necessary, but also the transfer of its ownership. Thus, according to the interpretation of article 155, paragraph 2, item x, paragraph “b” and paragraph 3, electrical energy is considered as a commodity for the purposes of ICMS incidence.

However, even though RN 482 clarifies that the relationship between the energy injected and that consumed is compensation, that is, as a free loan (Article 6, § 1), the State Finance Departments are instructed to charge the ICMS on all energy consumed by the Consumer, regardless of whether there is compensation with credits, unless there is legislation allowing its exemption.

It turns out that, within the scope of DG, there is no commercial intention for the injection of electrical energy into the network, since the free (mutual) loan established between consumer and distributor does not imply a transfer of ownership for the purposes of the ICMS tax incidence hypothesis.

In April 2015, Confaz (National Council for Financial Policy) signed with the States of the Federation (and the Federal District) ICMS Agreement No. 16/2015, First Clause, § 1°, regulating the exemption from ICMS in operations electrical energy compensation in DG (in verbs):

The States of (…) are authorized to grant EXEMPTION FROM ICMS levied on electrical energy supplied by the distributor to the consumer unit, in the amount corresponding to the sum of the electrical energy injected into the distribution network by the same consumer unit with the active energy credits originating NA OWN CONSUMER UNIT in the same month, in previous months OR IN ANOTHER CONSUMER UNIT OF THE SAME HOLDER, under the terms of the Electricity Compensation System, established by Normative Resolution No. 482, of April 17, 2012.

I – applies only to the compensation of electrical energy produced by microgeneration and minigeneration defined in the aforementioned resolution, whose installed power is, respectively, less than or equal to 75 kW and greater than 75 kW and less than or equal to 1 MW;

II – does not apply to availability costs, reactive energy, power demand, connection charges or use of the distribution system, and any other amounts charged by the distributor.

Thus, with the adhesion of the States to ICMS Agreement No. 16/2015, the ICMS charge began to apply only to the energy to be billed by the local Distributor in a given month, which is given by the difference between the energy consumed and the energy injected into the Network (added to energy credits from previous months).

Therefore, it is important to highlight that the exemption does not apply:

1. the modalities of shared generation (Consortium or Cooperative) and multiple Consumer Units (condominiums); It is
2. to projects with installed power above 1MW, since ICMS Agreement nº 16/2015 was created during the validity of RN 482/2012, without considering the changes brought by RN 687/2015 and 786/2017.

In summary, only the following will be able to benefit from the exemption:

1. Consumer Units belonging to the same UCG holder (thus considered UCs of the same Headquarters/Branch); It is
2. plants up to 1MW; and the exemption only applies to the portion of the Energy Tariff (TE), with no exemption from ICMS for the Cost of Availability, Reactive Energy, Power Demand, Connection Charges or Use of the Distribution System and any other amounts charged by the Distributor.

PIS/PASEP and COFINS

In accordance with Approval Resolution No. 227, of 10/18/05, of ANEEL, distribution companies must calculate the rates and charge them, demonstrating separately on the consumer's electricity bill the PIS/PASEP and COFINS.

However, there is an exemption that is valid for all States of the federation, and which is given by Law No. 13,169/2015, of October 2015.

Art. 8^O The rates of the Contribution for PIS/Pasep and the Contribution for Social Security Financing – COFINS on the active electrical energy supplied by the distributor to the consumer unit, in the amount corresponding to the sum of active electrical energy injected into the distribution network by the same consumer unit with active energy credits originated in the consumer unit itself in the same month, in previous months or in another consumer unit of the same holder, under the terms of the Electricity Compensation System for microgeneration and distributed minigeneration, as regulated by the National Electric Energy Agency – ANEEL. (with emphasis added).

However, in shared generation formats (consortiums and cooperatives) and multiple UCs (Condominiums), taxes are charged on the totality of energy consumed by the UC, regardless of the value deducted in credits, since it is a meeting of Diverse consumers (different UC ownership).

As this is (always) remote generation, it is important to point out that the location where the plant is located must be owned by the consortium or cooperative, while the consumer units where the credits will be compensated belong to those involved in the association.

The location (land) where the distributed micro or mini-generation is located will be considered a consumer unit (CU), whose owner must be the Cooperative or Consortium (with its own CNPJ); in this case, ownership can be by possession or by property. By possession, we can understand the holder of a rental or lease agreement for lots or land.

When leasing areas for the installation of solar plants, it is essential to highlight that REN 482 expressly prohibits the sale of energy, that is, a relationship cannot be established between R$/kWh in the rental pricing. Article 6-A of REN 482 prohibits the rental (or leasing) of land, lots and properties under conditions in which the amount charged is in reais per unit of electrical energy. However, there is no prohibition on equipment rental.

Once the solar plant is made viable, the energy generated is then shared among the members, through the definition of apportionment percentages defined by the entity (consortium or cooperative).

According to art. 7th, item VIII of REN 482, it is up to the holder of the UC where the solar plant is located to define the percentage of energy that will be allocated to each UC participating in the Electric Energy Compensation System, and may request the change from the distributor, in writing, and at least 60 days in advance of its application.

Thus, the criteria for dividing surplus energy is free and it is up to the cooperative or Consortium to define the percentage that will be allocated to each of the cooperative members/consortium members. Once energy compensation is made within the same billing cycle, the remaining credits remain in the UC to which they were allocated.

Adhesion to the Compensation System occurs by sending the Constitutive Act of the Cooperative or Consortium to the Concessionaire together with the Credit Apportionment Form, which is the document where the participants of the Cooperative or Consortium decide the percentage of the energy produced by the solar plant will be credited in each of the UCs.