20-07-2017

With Provisional Measure 579, of September 11, 2012, (“MP 579/12”), later converted into Law 12,783/2013, the Federal Government attempted to promote a reformulation of the energy sector, with the earlier renewal of concessions, for the generation, transmission and distribution of electric energy for a maximum period of thirty (30) years, in new standards of quality and price. Government’s final intent was to reduce the energy tariff to the consumer, which, unfortunately, was not achieved due to several structural problems and planning failures. In any case, several concessionaires joined the program and renewed their concessions in advance.

With the earlier renewal, the concessionaires would be entitled to receive indemnification for investments regarding the reversible assets (of the mentioned segments of generation, transmission and distribution) not yet fully amortized or depreciated. The purpose was to maintain the economic-financial balance of the contractual relationship between the concessionaire and the Public Authorities, since the investments not yet fully amortized would be indemnified based on a methodology stipulated in future regulations.

In regulating this matter, ANEEL defined the criteria for calculating the New Replacement Value (“VNR”) of transmission facilities, for the purpose of indemnifying the portion of assets not yet depreciated. It was also established that the amounts approved by ANEEL for the assets considered as not depreciated would be included in the Regulatory Remuneration Base of the transmission concessionaires and that their cost of capital would be added to the respective Allowed Annual Revenue (“RAP “).

In practice, these regulations will imply in an increase of the tariffs paid as consideration for the public electricity transmission service, since the indemnification of these concessionaires is included in the scope of their remuneration. The amount in question reaches R$ 62 billion and its payment was challenged in court by several market agents, arguing the existence of irregularities in the form of their collection. Among the arguments against payment of the compensation we have (i) the possible adoption of a misleading calculation criteria, especially in relation to the updating of values and the respective incidence application of interest on equity; and (ii) the burden to consumers of the consequences of the delay of the Federal Government in paying values that would not have a tax nature.

Based on these arguments, companies and associations of the energy sector obtained injunctions to prevent the charge through energy tariffs, of the billionaire indemnities of energy transmission companies referring to old assets that have not yet been depreciated, a charge that began to be effective in July 2017.

As a result of these injunctions, ANEEL announced the readjustment of RAP of some of the indemnified transmission companies, removing from the calculation the payment of the remuneration or interest for the capital not received between January 2013 (beginning of extensions) and June 2017 (injunction). Thus, according to ANEEL calculations, the RAP of these transmission companies would be reduced by approximately 13.6%. The decisions raised concerns to the transmission companies benefiting from the extensions, while they were celebrated by other agents in the electricity sector, mainly by the large energy-consuming companies.

Based on such decisions, other companies are evaluating the possibility to file similar lawsuits in order to reduce the RAP. In this sense, Schmidt, Valois, Miranda, Ferreira & Agel – Advogados is monitoring this matter and is also assisting some players of the electric sector on this subject.

Legislation and Regulation of the Power Sector from April 26 to June 27, 2017

Decrees:
Decree No. 9,047, dated of May 10, 2017: Alters Decree No. 7,246, dated 07.28.2010, which regulates Law No. 12,111, dated of 12.09.2009, which deals with the electric power service of the Isolated Systems, the transmission facilities for international interconnections in the National Interconnected System – SIN, and makes other provisions. To access the full text, click here.

MME’s Ordinances:
Ordinance No. 191, dated of May 12, 2017: Alters the Annex to MME Ordinance No. 133, dated of 04.04.2017, which indicates the list of hydroelectric plants which compose the auction for the granting of the hydroelectric generation concessions. To access the full text, click here.
Ordinance No. 200, dated of May 18, 2017: Approves the guidelines of the system for the performance of the Competitive Mechanism of Decontracting of Reserve Energy of 2017. To access the full text, clickhere.
Ordinance No. 209, dated of May 29, 2017: Approves the first revision of the Manual for Operationalization which establishes the technical and financial criteria, procedural and priorities which will be applied in the National Program for Universalization of Access to Electricity – Luz Para Todos. To access the full text, click here.
Ordinance No. 217, dated of June 08, 2017: Delegates power to the Secretary of Electric Energy of the Ministry of Mines and Energy for the performance of acts aimed at establishing specific guidelines not provided for in the Manual for Operationalization of the “Luz Para Todos” Program and in the Handbook for Assistance to Remote Regions of Isolated Systems, within the scope of the National Program for Universal Access and Use of Electric Energy – “Luz Para Todos“. To access the full text, click here.
Ordinance No. 218, dated of June 08, 2017: Establishes guidelines for the transition resulting from the transfer to the Electric Energy Trading Chamber (CCEE) of the administrative and financial management of the Energy Development Account (CDE), as of May 1, 2017, under the “Luz Para Todos“. To access the full text, click here.
Ordinance No. 220, dated of June 09, 2017: Alters the art. 2 of MME Ordinance 007, dated of 01.09.2013, as well as, revokes PRT MME 489, dated of 09.12.2014, and 001, dated of 01.05.2016. To access the full text, click here.

Aneel’s Ordinances:
Ordinance No. 4.603, dated of June 07, 2017: Constitutes the Special Accreditation Committee to act in the scope of the accreditation of the Superintendence of Inspection of Electricity Services – SFE, composed of the listed servers; as well as revokes Aneel Ordinance 3,684, dated of 08.25.2015. To access the full text, click here.

Aneel’s Resolutions:
Normative Resolution No. 765, dated of April 25, 2017: Establishes the requirements and procedures for obtaining an authorization grant to exploit hydraulic potential from 5,000 to 50,000 kW, without the characteristics of a Small Hydropower Plant; alters the Normative Resolution Aneel No. 673, dated 08.04.2015, and revokes Normative Resolution Aneel No. 412 dated 10.05.2010. To access the full text, click here.
Normative Resolution No. 767, dated of May 09, 2017: Alters Modules 6 – Required Information and Obligations and 8 – Quality of Electric Energy on the Procedures of Distribution of Electric Energy in the National Electrical System – PRODIST. To access the full text, click here.
Normative Resolution No. 768, dated of June 02, 2017: Alters Normative Resolution ANEEL 414, dated 09.09.2010, regarding the improvement of the classification criteria for consumer units. To access the full text, click here.
Normative Resolution No. 771, dated of June 13, 2017: Includes the sole paragraph in art. 78 of Normative Resolution ANEEL 414 of 09.09.2010; approves Revision 5 of Module 7 of the Procedures for Distribution of Electric Energy in the National Electric System – PRODIST, as well as revokes Authorizing Resolutions ANEEL 201 of 05.30.2005, 383 of 12.19.2005, 687 of 09.27.2006 and 842 of 03.13.2007. To access the full text, click here.
Ratifying Resolution No. 2.257, dated of June 22, 2017: Homologates the result of the periodic tariff review, setting the repositioning of the Allowed Annual Revenue – RAP – of the Concession Contracts ANEEL 001 of 2007, 002 of 2007, 003 of 2007, 004 of 2007, 005 of 2007, 006 of 2007, 007 of 2007, 008, 2007, 009, 2011, 010, 2011, 012, 2011, 013, 2011, 014, 2011 2012, 006 2012, 005 2012, 006 2012, 007 2012, 002 2012, 001 2012, 005 2012, 006 2012, 006 2012, 007 2012, 001 of 2012, 009 of 2012, 010 of 2012, 011 of 2012, 012 of 2012, 013 of 2012, 014 of 2012, 015 of 2012, 016 of 2012, 017 of 2012, 018 of 2012 and 019 of 2012. To access the full text, click here.

Aneel’s Decisions:
Decision No. 1.166, dated of April 27, 2017: Publishes the Eletrobras reference table with the direct costs of the connection extension, the internal installation kit and the input standard, for the calculation of the economic subsidy with resources of the CDE for the installations carried out from 04.01.2017 to 06.30.2017, according to Annex I. To access the full text, click here.
Decision No. 1.185, dated of April 28, 2017: Homologates the Monthly Difference of Revenue in the scope of the application of the Electric Energy Social Tariff – TSEE and the resources of the Energy Development Account – CDE to be transferred to the distributors by Centrais Elétricas Brasileiras SA – Eletrobras, referring to the month of March 2017 and residual, in Annexes I and II; and denies homologation to the competencies of Annex III. To access the full text, click here.
Decision No. 1.187, dated of April 28, 2017: Grants the suspensive effect of the administrative appeal of the Brazilian Association of Electric Power Transmission Companies – ABRATE, in the face of Decision SGT/Aneel No. 1,116, dated 04.24.2017, regarding the values of the CDE quotas, for February 2017, regarding the concessionaires which serve a free consumer and/or self-producer with a consumer unit connected to the Basic Network of the National Interconnected System, since the requirements for suspension are present. To access the full text, click here.
Decision No. 1.192, dated of April 28, 2017: Establishes the tariff red flag level I which will be in force in May 2017. To access the full text, click here.
Decision No. 1.213, dated of May 02, 2017: Approves the draft of the Concession Contract for Public Service for the Distribution of Electric Energy, for use in the bidding processes, and forwards the referred draft Contract to the Ministry of Mines and Energy – MME. To access the full text, click here.
Decision No. 1.220, dated of May 03, 2017: Determines to the Electric Energy Trading Chamber (CCEE) that, in the Financial Settlement regarding the Contracting of Electric Energy in the Regulated Environment, use the acronym ENF_DTF for the 2nd Alternative Source Auction (LFA) and year of calculation. To access the full text, click here.
Decision No. 1.237, dated of May 05, 2017: Establishes the values of the centralizing account of the resources of tariff flags, for the purposes of the settlement of short-term market operations with the CCEE, regarding the accounting for March 2017. To access the full text, click here.
Decision No. 1.287, dated of May 09, 2017: Terminates the procedures for transferring the ITAIPU Bonus to residential and rural consumers, due to the calculation of a negative result in the Itaipu Electric Energy Trading Account in 2016. To access the full text, click here.
Decision No. 1.334, dated of May 16, 2017: Provides the second part of the analyzes of the distributors’ manifestations to the TSEE validation reports; on how, it informs that the discounts of the values calculated in the subsequent monthly homologations will be performed. To access the full text, click here.
Decision No. 1.340, dated of May 16, 2017: Revokes Decision SFF/Aneel No. 1.744, dated of 06.30.2016, which approved version 01/2016 of the SFF Surveillance Manual – AIS and BRR. To access the full text, click here.
Decision No. 1.354, dated of May 17, 2017: Agrees with the recommendations of the ONS Letter mentioned, regarding the representation of the hydroelectric operation of the hydroelectric plants of the São Francisco river basin, for 2017 to 2019, proposed by the National Operator of the Electric System in the scope of planning and programming studies of the Interconnected System, from the Monthly Operational Program of June 2017. To access the full text, click here.
Decision No. 1.383, dated of May 18, 2017: Provides the interested parties with information on the accounting, environmental, land, operation, maintenance, inspection, investment, granting, risk and personnel management aspects related to the Hydroelectric Plants that will be tendered in the Aneel Auction No. 01/2017, for contracting concessions under quotas of physical guarantee of energy and power. To access the full text, click here.
Decision No. 1.411, dated of May 23, 2017: Establishes the information forwarding models, available on the Aneel website, to update the Reference Price Bank to be used in the processes of authorization, bidding and revision of revenues of transmission concessionaires; and sets a certain deadline to send information, transmission projects, tendered or authorized, including those whose revenues were approved for improvements and reinforcements, in the years 2010 to 2016, with works completed. To access the full text, click here.
Decision No. 1.452, dated of May 26, 2017: Establishes the amounts of the cost quotas for the Incentive Program for Alternative Energy Sources (Proinfa) for July 2017, regarding concessionaires of the public electricity transmission service, serving the free consumer and/or self-producer of the National Interconnected System. To access the full text, click here.
Decision No. 1.456, dated of May 26, 2017: Establishes the green tariff that will be in force in June 2017. To access the full text, click here.
Decision No. 1.463, dated of May 29, 2017: Determines to the National Electric System Operator (ONS) to promote, from the Monthly Operational Program (PMO) of July 2017, the compatibility between supply and load of the plants dispatched or programmed and not simulated individually in the planning and programming support models of the electroenergetic operation, via gross load abatement. To access the full text, click here.
Decision No. 1.492, dated of May 30, 2017: Establishes the amounts of the centralizing account of the tariff flag resources for the purposes of settlement of the short-term market operations with the CCEE referring to the accounting for April 2017. To access the full text, click here.
Decision No. 1.546, dated of June 02, 2017: Establishes the Electric Energy Services Inspection Fee (TFSEE) for electricity distribution agents that have been updated or extended in the month of May 2017. To access the full text, click here.
Decision No. 1.658, dated of June 06, 2017: Alters the Allowed Annual Revenue – RAP, in the amounts mentioned, and the revision of the execution schedule of the project. To access the full text, click here.
Decision No. 1.659, dated of June 06, 2017: Alters the Allowed Annual Revenue – RAP, in the amounts mentioned, and the revision of the execution schedule of the project. To access the full text, click here.
Decision No. 1.779, dated of June 20, 2017: Disregards the provisions of paragraph 3 of art. 4 of Normative Resolution ANEEL 762, dated 02.21.2017, of the criteria for calculating the Allowed Annual Revenue – RAP to be homologated for the 2017-2018 tariff cycle; extends to all users of the transmission system; and establishes the new Tariff for the Use of the Basic Network Transmission System – TUST-RB and Frontier -TUST-FR and Itaipu Transport Tariff. To access the full text, click here.

Public Hearings of Aneel:
Public Hearing Notice No. 22, dated of May 17, 2017: Informs the interested parties that the Public Hearing was opened, with contribution period until 07.03.2017, with the objective of obtaining subsidies for the improvement of the regulation of methodology for the Extraordinary Tariff Revision of Concessionaires of Distribution of Electric Energy. To access the full text, click here.
Public Hearing Notice No. 24, dated of May 17, 2017: Informs the interested parties that a Public Hearing was opened, with a contribution period until 06.30.2017, and the on-site meeting at the Aneel Auditorium in Brasília, (DF), with the objective of obtaining subsidies for the improvement of the revision proposal of Normative Resolution Aneel No. 409, dated of 08.10.2010, which establishes criteria and procedures for the participation of unregistered hydroelectric project centrally in the Energy Reallocation Mechanism (MRE). To access the full text, click here.
Public Hearing Notice No. 25, dated of May 17, 2017: Informs the interested parties that the Public Hearing was opened, with a contribution period until 07.03.2017, with the objective of obtaining subsidies for improvement of the revision of Normative Resolution Aneel No. 568, of 2013, which establishes conditions and terms for which the CCEE republishes the Settlement Price of Differences – PLD. To access the full text, click here.
Public Hearing Notice No. 26, dated of May 19, 2017: Informs the interested parties that a Public Hearing was opened, with a contribution period until 06.18.2017, with the purpose of obtaining subsidies for the improvement of the draft of the Tender Protocol, and its Annexes, of the Aneel Auction No. 1/2017, regarding the Concession of Hydroelectric Power Plants – UHE of 2017, with the consequent allocation in quotas of physical guarantee of energy and power. To access the full text, click here.
Public Hearing Notice No. 29, dated of May 24, 2017: Informs the interested parties that the Public Hearing was opened, with contribution period until 07.31.2017, with the objective of obtaining subsidies for the improvement of the regulation of aspects related to the electric power supply to electric vehicles. To access the full text, click here.
Public Hearing Notice No. 30, dated of May 31, 2017: Informs the interested parties that the Public Hearing was opened, with contribution period until 06.30.2017, with the objective of obtaining subsidies for improvement of the draft of the Tender Protocol, and its annexes of the Competitive Mechanism of Decontracting of Reserve Energy, dated of 2017. To access the full text, click here.
Public Hearing Notice No. 31, dated of May 31, 2017: Informs the interested parties that the Public Hearing was opened, with contribution period from 05.31.2017 to 07.10.2017, in order to obtain subsidies for the improvement of the fourth periodic tariff review of Energisa Paraíba – Distribuidora de Energia S.A – EPB. To access the full text, click here.
Public Hearing Notice No. 32, dated of June 07, 2017: Informs the interested parties that the Public Hearing was opened, with contribution period of 06.07.2017 to 07.21.2017, with the objective of obtaining subsidies for the improvement of the calculation of the regulatory parameters and the limits of the collective continuity indicators of Equivalent Duration Of Interruption per Consumer Unit – DEC and Equivalent Frequency of Interruption per Consumer Unit – FEC for the tariff processes of designated Distributors, defined pursuant to the Normative Resolution ANEEL 748, dated of 2016. To access the full text, click here.
Public Hearing Notice No. 33, dated of June 21, 2017: Informs the interested parties that the Public Hearing was opened, with contribution period from 06.22.2017 to 07.07.2017, in order to obtain subsidies to change the date of the periodic tariff review of Celg Distribuição SA – Celg-D from 10.22.2017 to 10.22.2018. To access the full text, click here.
Public Hearing Notice No. 34, dated of June 21, 2017: Informs the interested parties that the Public Hearing was opened, with contribution period of 06.22.2017 to 08.07.2017, in order to obtain subsidies for the improvement of the provisions related to the definition of the corresponding limits for the commercial quality indicator Equivalent Frequency Of Complaint – FER. To access the full text, click here.

Public Consultations of Aneel:
Public Consultation Notice No. 5, dated of May 10, 2017: Informs the agents of the electric energy sector and other stakeholders, that a Public Consultation was opened, with contribution period until 06.08.2016, with the objective of obtaining subsidies for the proposals of the Marketing Procedures – PdCs: adhesion to the CCEE, Registration of agents, Attendance, termination from the CCEE, Free Environment Contracts, Regulated Environment Contracts, Financial Settlement related to the contracting of Angra 1 and 2, Financial Settlement related to Physical Guarantee Quotas, Reserve Energy Calculation, Energy Assignment Reserve, and MCSD monthly, free exchanges and 4%. Para ter acesso ao texto integral e ao resultado, clique here.
Public Consultation Notice No. 6, dated of May 30, 2017: Informs the agents of the electric energy sector and other interested parties, that a Public Consultation was opened, with contribution period until 06.13.2017, with the objective of obtaining subsidies for the representation of centrally dispatched or scheduled plants, not individually simulated in the models of Planning and scheduling the operation. To access the full text, click here.
Public Consultation Notice No. 7, dated of 26 de junho de 2017: Informs the agents of the electric energy sector and other interested parties, that a Public Consultation was opened, with contribution period from 06.26.2016 to 08.28.2017, through exchange of documents, with the objective of obtaining subsidies for the improvement of the provisions of the According to Normative Resolution ANEEL 414, dated of 2010, according to item 33 of the Regulatory Agenda 2016-2018. To access the full text, click here.

Public Meetings of Aneel’s Board of Directors:
15th Public Meeting: Held on 05.02.2017. To access the content of the meeting, click here.
16th Public Meeting: Held on 05.09.2017. To access the content of the meeting, click here.
17th Public Meeting: Held on 05.16.2017. To access the content of the meeting, click here.
1st Extraordinary Public Meeting: Held on 05.18.2017. To access the content of the meeting, click here.
18th Public Meeting: Held on 05.23.2017. To access the content of the meeting, click here.
19th Public Meeting: Held on 05.30.2017. To access the content of the meeting, click here.
20th Public Meeting: Held on 06.06.2017. To access the content of the meeting, click here.
21st Public Meeting: Held on 06.13.2017. To access the content of the meeting, click here.
22nd Public Meeting: Held on 06.20.2017. To access the content of the meeting, click here.

Meetings of the MME’s Energy Sector Monitoring Committee: 
180ª Reunião Ordinária: Held on 05.03.2017. To access the content of the meeting, click here.

We remain available should you need any further information on this matter:

      
      

http://mailchi.mp/4b6b6e2747e5/schmidt-valois-miranda-ferreira-agel-oil-and-gas-304603?e=ba9c483185.