{"id":93244,"date":"2025-03-07T18:52:51","date_gmt":"2025-03-07T21:52:51","guid":{"rendered":"https:\/\/murray.adv.br\/?p=93244"},"modified":"2025-03-07T18:52:52","modified_gmt":"2025-03-07T21:52:52","slug":"itaipu-decree-expected-to-raise-power-bills-for-low-income-consumers","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/itaipu-decree-expected-to-raise-power-bills-for-low-income-consumers\/","title":{"rendered":"Itaipu decree expected to raise power bills for low-income consumers"},"content":{"rendered":"\n
Change to help manage exchange-rate fluctuations reduces bonus that would go toward offsetting electricity increases for residential and rural consumers<\/em><\/strong><\/h6>\n\n\n\n

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03\/07\/2025<\/p>\n\n\n\n

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Decree 12,390\/2025, published in the Di\u00e1rio Oficial da Uni\u00e3o (DOU) on February 5, may impose additional costs on low-income consumers, experts told Valor. They discussed the government’s decision to redirect part of the so-called \u201cItaipu bonus\u201d commonly used to reduce electricity bills for poorer customers. With this decree, a portion of these funds will now be allocated to cover the deficit of the Itaipu Commercialization Account.<\/p>\n\n\n\n

The Itaipu Account comprises various revenue sources, primarily from payments made by distributors in the South, Southeast, and Central-West regions, which share the cost of power generation from the binational plant. After covering the hydroelectric plant’s expenses, any remaining balance is returned to consumers.<\/p>\n\n\n\n

Following Wednesday’s decree, Empresa Brasileira de Participa\u00e7\u00f5es em Energia Nuclear e Binacional (ENBPar)\u2013the state company overseeing Brazil’s stake in Itaipu\u2013is authorized to establish a financial reserve, directing up to 5% of the positive balance from the Itaipu Account to manage fluctuations in the plant’s power cost. These fluctuations occur because the cost is booked in U.S. dollars and subject to currency variations throughout the year. Currently, the hydroelectric plant’s power cost is $17.66\/kW, effective until the end of March.<\/p>\n\n\n\n

Although the government argues that the measure prevents a 5.99% increase in average costs, experts warn that, in practice, using the \u201cbonus\u201d will result in disadvantages for lower-income consumers. Since up to 5% of these resources might be used to reduce the tariff deficit, the financial amount available for consumers will decrease. This amount is credited as a discount on the bills of residential and rural classes in Brazil with consumption billed below 350 kilowatt-hours per month.<\/p>\n\n\n\n

The decree was issued after the Brazilian Electricity Regulatory Agency (Aneel) identified a calculation error in the price agreement between Brazil and Paraguay in 2024, resulting in a $120.9 million deficit (approximately R$700 million) in Itaipu’s accounts. Former Aneel director Edvaldo Santana notes that the Itaipu Account balance is not a real bonus but rather a refund of overpaid amounts by consumers.<\/p>\n\n\n\n

The National Front of Energy Consumers had already warned that redirecting the bonus balance would increase electricity bills: \u201cThis is happening due to the poor agreement signede last April by Minister Alexandre Silveira and the successive increases in Itaipu’s socio-environmental expenses with funds that should have ensured tariff moderation,\u201d said the front’s president, Luiz Eduardo Barata.<\/p>\n\n\n\n

The Ministry of Mines and Energy stated that the decree \u201crefers to a complementary strategy to the annual contribution already made by Itaipu.\u201d According to the ministry, it is \u201ca structural solution used to cover remaining balances of the commercialization account over time.\u201d<\/p>\n\n\n\n

For former Aneel general director Jerson Kelman, the decree resolves the calculation error in the negotiation between Brazil and Paraguay regarding power costs in 2024. However, a technical note from the National Academy of Engineering indicates that the $301 million cashback was insufficient to ensure cost stability in power bills.<\/p>\n\n\n\n

\u201cLike a magician, the government put money in the consumer’s left pocket, taking it from their right pocket. If the government had adhered to the treaty, refraining from inventing socio-environmental sponsorships in Brazil and Paraguay unrelated to the plant’s funding, Brazilian consumers would be paying about half of what they currently pay for Itaipu\u2019s power,\u201d he asserts.Decree 12,390\/2025, published in the Di\u00e1rio Oficial da Uni\u00e3o (DOU) on Wednesday (5), may impose additional costs on low-income consumers, experts told Valor. They discussed the government’s decision to redirect part of the “Itaipu bonus” used to reduce electricity bills for poorer customers. With this decree, a portion of these funds will now be allocated to cover the deficit of the Itaipu Commercialization Account.<\/p>\n\n\n\n

The Itaipu Account comprises various revenue sources, primarily from payments made by distributors in the South, Southeast, and Midwest regions, which share the cost of energy generation from the binational plant. After covering the hydroelectric plant’s expenses, any remaining positive balance is returned to consumers.<\/p>\n\n\n\n

Following Wednesday’s decree, the Empresa Brasileira de Participa\u00e7\u00f5es em Energia Nuclear e Binacional (ENBPar) – the state company overseeing Brazil’s stake in Itaipu – is authorized to establish a financial reserve, directing up to 5% of the positive balance from the Itaipu Account to manage fluctuations in the plant’s tariff. These fluctuations occur because the Itaipu tariff is denominated in U.S. dollars and is subject to currency variations throughout the year. Currently, the hydroelectric plant’s tariff is US$17.66\/kW, effective until the end of March.<\/p>\n\n\n\n

Although the government argues that the measure prevents a 5.99% increase in average tariffs, experts warn that, in practice, using the “bonus” will result in disadvantages for lower-income consumers. Since up to 5% of these resources might be used to reduce the tariff deficit, the financial amount available for consumers will decrease. This amount is credited as a discount on the bills of residential and rural classes in Brazil with consumption billed below 350 kilowatt-hours per month.<\/p>\n\n\n\n

The decree was issued after Aneel identified a calculation error in the tariff agreement between Brazil and Paraguay in 2024, resulting in a US$120.9 million deficit (approximately R$700 million) in Itaipu’s accounts. Former Aneel director Edvaldo Santana notes that the Itaipu Account balance is not a real bonus but rather a refund of overpaid amounts by consumers.<\/p>\n\n\n\n

The National Front of Energy Consumers had already warned that redirecting the bonus resources would increase electricity bills: “This is happening due to the poor agreement made last April by Minister Alexandre Silveira and the successive increases in Itaipu’s socio-environmental expenses with funds that should have ensured tariff moderation,” said the front’s president, Luiz Eduardo Barata.<\/p>\n\n\n\n

When contacted, the Ministry of Mines and Energy stated that the decree “refers to a complementary strategy to the annual contribution already made by Itaipu.” According to the ministry, it is “a structural solution used to cover remaining balances of the commercialization account over time.”<\/p>\n\n\n\n

For former Aneel General Director Jerson Kelman, the decree resolves the calculation error in the negotiation between Brazil and Paraguay regarding the Itaipu tariff in 2024. However, a technical note from the National Academy of Engineering indicates that the US$301 million “cashback” was insufficient to ensure electricity bill stability.<\/p>\n\n\n\n

“Like a magician, the government put money in the consumer’s left pocket, taking it from their right pocket. If the government had adhered to the Treaty, refraining from inventing socio-environmental sponsorships in Brazil and Paraguay unrelated to the plant’s funding, Brazilian consumers would be paying about half of what they currently pay for Itaipu energy,” he asserts.<\/p>\n\n\n\n

*By Robson Rodrigues And F\u00e1bio Couto\u00a0\u2014 S\u00e3o Paulo and Rio de Janeiro<\/p>\n\n\n\n

Source: Valor International<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Change to help manage exchange-rate fluctuations reduces bonus that would go toward offsetting electricity increases for residential and rural consumers 03\/07\/2025 Decree 12,390\/2025, published in the Di\u00e1rio Oficial da Uni\u00e3o (DOU) on February 5, may impose additional costs on low-income consumers, experts told Valor. 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