Madrona News Regulatory – Energy sector 75th Issue

05.03.2021 – MME approved the Energy Information System of Brazil – SIE Brasil, an online platform that gathers information on energy supply and demand, energy facilities, resources and reserves, energy prices, consumption equipment, industrial production, efficiency, demography, economy, particulate, and prospective emissions, as well as legal and documentary information.

Comment: The website, which is still undergoing improvement, may be accessed at: https://www.mme.gov.br/SIEBRASIL/. In it, information from MME, EPE, ANEEL, ANP, ANM, ONS and CCEE will be consolidated.

05.03.2021 – Decree No. 10.693/2021 qualified the hydroelectric plants UHE Ercilândia and UHE Apertados within the scope of the Investment Partnership Program of the Presidency of the Republic.

Comment: UHE Ercilância and UHE Apertados are located in Paraná and are still in the process of hiring companies to carry out environmental studies.

05.06.2021 – Companhia Energética de Minas Gerais (CEMIG) disclosed in a Relevant Information notice that the company is promoting the organization of a competitive process for the divestment CEMIG’s entire equity in Taesa.

Comment: According to the schedule presented by CEMIG, the deadline for carrying out due diligence by potential purchasers was opened, a period which will extend until 07.30.2021. For interested parties to access the Virtual Data Room (VDR), they must enter into a Confidentiality Agreement and pay the VDR access fee in the amount of R$ 100,000.00.

05.18.2021 – ANEEL approved, through Order No. 1.380/2021, the consolidation of regulatory accounting rules. Accordingly, Order No. 1.380/2021, Normative Resolutions No. 396/2010, No. 605/2014, and No. 814/2018 were updated and brought together in a single regulation.

Comment: The consolidation of accounting rules was made in accordance with Decree No. 10,139/2019, which establishes deadlines and procedures for the review and consolidation of normative acts inferior than decrees in order to update, revise and consolidate ordinances, resolutions, normative instructions and other normative acts. Also on accounting rules, ANEEL published Normative Resolution No. 933/2021, approving the structure of the Accounting Manual for the Electric Sector, and revoking outdated normative resolutions.

05.19.2021 – Public Consultation No. 024/2021 was published, with the purpose of obtaining subsidies to improve adjustments and additions to the draft of the Tender Notice and Annexes of the Transmission Auction No. 02/2021, considering the inclusion of Lot 5 in the Auction. Contributions will be received until June 14, 2021, and eventual contributions may be forwarded to the electronic address cp024_2021@aneel.gov.br or through digital protocol.

Comment: Lot 5 includes a 10-km transmission line and a substation in Macapá, in the state of Amapá. The four other lots of the auction are under a different public consultation (Public Consultation No. 019/2021), as Lot 5 was included in the auction only after the opening of the referred consultation, in response to the letter sent by the Ministry of Mines and Energy – MME requesting the inclusion of the necessary expansion facilities of the Basic Network for the increase of reliability of the service to the Municipality.

05.19.2021 – Public Consultation No. 027/2021 was published to collect subsidies for the improvement of the Electricity Trading Rules to operationalize the provisions of Normative Resolutions Nos. 898 and 899. Until June 25, 2021, ANEEL will receive contributions through the electronic address cp027_2021@aneel.gov.br or through digital protocol on ANEEL’s website.

Comment: The December 2020 regulations improve the Energy Reallocation Mechanism (MRE), notably regarding the treatment of Secondary Energy Financial Exposures, the MRE energy allocation rule and the assured energy seasonality criteria for hydroelectric plants participating in the MRE.

05.24.2021 – The values of the studies that integrate generation and transmission auctions and procedures for reimbursement to the developers of these studies were established through Normative Resolution no. 934/2021.

Comment: The normative defines the values and reimbursement conditions for studies involving the inventory of hydrographic basins, the analysis of technical and economic feasibility of hydroelectric projects involving bidding processes for contracting public service of electricity transmission.

05.25.2021 – ANEEL approved the auction notice for the A-4 and A-5 Existing Energy Auctions. The intention is to sign PPAs in the Regulated Environment (CCEARs) with a duration of 15 years, contracting existing plants or plants that will start operating before the beginning of supply, scheduled to occur on 01/January/2025 and 01/January/2026 for A-4 and A-5, respectively.

Comment: The auctions will be held on June 25, 2021, and the contracting intends to substitute the energy generated by coal, gas, diesel and fuel oil plants to natural gas or mineral coal plants. It is necessary that the generation projects be previously qualified by the Energy Research Company – EPE.

05.27.2021 – ANEEL initiated Public Consultation No. 028/2021 with the intention of collecting subsidies for changes in the Electricity Trading Rules, in view of the regulatory guidelines regarding hydroelectric displacement motivated by inflexible thermoelectric generation. Contributions may be sent until 12.July.2021 through the electronic address cp028_2021@aneel.gov.br or through digital protocol on ANEEL’s website.

Comment: In 2019, the regulatory guidelines regarding the framework of hydroelectric displacement motivated by inflexible thermoelectric generation were qualified and delimited. With this, CCEE suggested a draft adaptation of its Commercialization Rules, which is the object of Public Consultation No. 028/2021.

05.28.2021 – Articles 3 and 3-A of Law No. 10.848, which deal with the contracting of reserve capacity in the form of power, were regulated by Decree no. 10.707/2021.

Comment: The objective of contracting reserve capacity is to assure the continuity of electric energy supply by attending the power needs required by the National Interconnected System (SIN). Contracting reserve capacity will serve as ballast for the future sale of energy and will be done through auctions promoted by ANEEL, with the signing of reserve capacity power contracts (CRCAP) between the selling agents and CCEE – representing the consumption agents.

The regulation of the contracting of reserve capacity in the form of power represents an important measure for the electric sector and demonstrates its progress in the modernization process of the sector. The modernization occurs in the possibility that the contracting of ballast and energy be done separately, propitiating a better allocation of costs in the contracting process and greater reliability to the sector.

Regarding this topic, we inform that Public Consultation No. 108/2021 of the Ministry of Mines and Energy – MME is open until June 11, 2021, with the purpose of receiving contributions to the draft of the Ordinance that will define the
guidelines for the auction for contracting electric power and associated energy.