The creation of a cost-sharing surcharge to manage power distributors' unmet contracts after consumers transition to bilateral models is gaining traction in Brazil, as the opening of the power market progresses in congress.
The surcharge would cover the costs of long-term contracts already signed by distributors who were counting on future demand from regulated power clients. These contracts include undisclosed maintenance and operation costs of the Brazilian electrical system — many of which are not billed to free-market consumers — as well as the costs of energy itself. Power distribution association Abradee supports the proposal, which awaits legislative action.
Electricity resellers' association Abraceel champions "a balanced and sustainable market opening," group president Rodrigo Ferreira said. Ferreira supports the necessity of opening the market in a way that does not overtax consumers who choose not to transition to bilateral contracts and supports the idea of a surcharge paid by all consumers, free and regulated, as a possible way of covering unmet contract costs.
"Dealing with the over-contracting [of energy that] the migration will cause to distributors is timely and is a part of the transition," Ferreira said. "We must treat this issue."
He is also concerned about distributed generators who install solar panels on rooftops and still do not have a regulation to pay part of the cost of the system.
The surcharge is not universally embraced, however, as other solutions to the problem have been discussed.
Dorel Soares Ramos, a University of Sao Paulo Polytechnic School professor, argues that billing everyone would force regulated consumers who do not migrate pay for a transition in which they have chosen not to participate.
"There would also have to be a transfer of the ownership of the contracts," Ramos said.
Ramos' solution would be the creation of a central agent that would mediate the reselling of the over-contracted energy. Other alternatives circulating in the market include future compensation of distributors, the direct payment of the costs involved to generators, and the renegotiation of contracts.
Large power consumers, already in the bilateral market, fear the creation of a surcharge may open space for other costs and benefits directed to favor some groups.
