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Study by the Ministry of Economy defends reduction of light bill distortions

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Study by the Ministry of Economy defends reduction of light bill distortions

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(Photo: Marcelo Camargo / Brazil Agency)

The Secretariat of Evaluation, Planning, Energy and Lottery (Secap), of the Ministry of Economy, defended the reduction of "existing distortions" in the price of energy charged to the Brazilian consumer, including the end of sector charges embedded in the electricity tariff. These charges include public policy subsidies, enforcement fees, and costs related to system operation.

According to a study by the Secretariat, the average electricity tariff grew 241% between 2001 and 2018, above the inflation measured by the IPCA, which fluctuated 181% in the same period. "Electricity has become more expensive in real terms, impacting the purchasing power of the population and the competitiveness of the economy," says the study.

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The secretary points out that sector charges were one of the main responsible for the tariff increase, especially after Provisional Measure No. 579/2012, edited by then President Dilma Rousseff in an attempt to reduce the price of electricity to the consumer. The measure allowed the early renewal of concessions of plants, transmitters and distributors that matured between 2015 and 2017 and created subsidies to allow a reduction, in the first instance, in the electricity bill. "The MP made an artificial attempt to reduce electricity tariffs," says Secap.

The study considers that while some expenses are necessary for system security, there are subsidies embedded in unjustified charges, generating price distortions without any benefit to consumers of the electricity system. "The most appropriate would be to discontinue the subsidies, or find another means for their financing," he argues.

Among the subsidies that should be reevaluated under Pasta are the Energy Development Account (CDE), the Fuel Consumption Account (CCC), the Alternative Energy Sources Incentive Program (Proinfa), Research and Development (R&D) and Energy Efficiency (EE) and the System Service Charge (ESS).

Cost
According to the study, the sharp increase in sector charges contributed to make the Brazilian tariff the 6th most expensive of 22 countries analyzed. Depending on the methodology, the price of the Brazilian electricity bill is the 3rd highest.

For Secap, reducing charges would help lower the final price to the consumer of electricity, benefiting families and industries and increasing the competitiveness of the Brazilian economy.

"Rationalizing sectoral burdens should be seen as a priority agenda in the modernization of the electricity sector, removing cross-subsidies, making price signals clearer and allowing all sources to compete on the same basis. reduction of the final cost of electric power, a fundamental input for the increase of productivity, motor of the economic growth ", completes the study.

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