MP published in April authorized negotiation of transfers from the company to the CDE to reduce expenses that weigh on the electricity bill
The government Luiz Inacio Lula da Silva (PT) established the rules for the financial operation that aims to advance resources to be received from Eletrobras. The money, deposited by the company in the CDE (Energy Development Account), will be used to reduce electricity bills. This will be done by paying off expenses that currently weigh on energy rates.
The guidelines were set out in an interministerial ordinance, published this Friday (5 July 2024) in DOU (Official Gazette of the Union). The text is signed by the ministers Alexandre Silveira (Mining and Energy) and Fernando Haddad (Farm). With the definitions, the CCEE (Electric Energy Trading Chamber) may begin negotiations. Here is the full of the ordinance (PDF – 121 kB).
The advance of Eletrobras resources was authorized by the MP (provisional measure) 1,212 of 2024published by the government in April. However, the ordinance was necessary to regulate how this operation will be carried out in the market. Because of this, negotiations had not yet begun.
According to the ordinance of this Friday (5th July), CCEE must negotiate the advance of Eletrobras’ receivables to CDE, either through securitization of credit rights or other financial operations. This means that there will be no impact on Eletrobras, which will continue to make annual contributions, since the advance will be raised in the financial market.
For the law 14.182 of 2021which authorized the privatization of Eletrobras, the company imposed the obligation to make transfers to the CDE, a sectoral account that gathers subsidies for the electricity sector. According to the rules, the company must make payments for 25 years in order to reduce consumer rates.
In total, Eletrobras’ transfers to the CDE will total R$32 billion at the end of the 25 years. An initial installment of R$5 billion has already been paid in 2022, and the remainder will be made in annual deposits of approximately R$1 billion. In other words, there is still at least R$26 billion to be paid.
By anticipating these receivables in the market, the government wants to allocate the resources to pay off 2 loans taken out by the electricity sector in the financial market in recent years. The payment of both bills is supported by consumers’ electricity bills and puts pressure on tariffs. They are:
- The Covid Accountemergency loan made in 2020 to help energy distributors during the pandemic, when defaults increased;
- and the Water Scarcity Accountcontracted in 2022 due to the low level of hydroelectric reservoirs, which required the contracting of more expensive energy.
According to the ordinance, the anticipation of receivables will only occur “by characterizing the benefit to the consumer”since the operation will also have costs and discounts compared to the amount that would be paid in the long term.
The priority in using the resources will be to pay off the loans in full, deducting from each distributor’s quotas. The government estimates that the savings for consumers, still in 2024, would be in the order of R$7 billion. This is equivalent to a 3.5% drop in tariffs.
In addition to paying off the 2 loans, the government estimates that the amount to be advanced may have a surplus, depending on the negotiation process and the discounts that will be applied. This 2nd destination has not yet been defined.
The text also establishes that Eletrobras must pledge the credit rights owed to the CDE in favor of the creditors of the advance. In the event of any default by the company, the resources for payment to the creditors of the operation will be established by extraordinary quotas of the CDE, to be set by the Aneel (National Electric Energy Agency).
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