Brazilian power companies are launching retail divisions, eyeing low-voltage consumers that will be eligible to freely choose suppliers by 2024 and 2026.
The newest company to launch its division for small businesses and residential consumers is Brazilian power generator and trader Delta Energy. The company created Luz, a digital power supplier, aiming to snatch 15pc of the medium-sized power consumer market, a segment that will include 72,000 small businesses in 2024 spending at least R10,000/month ($2,045/month).
Luz is also looking to lure 40-50pc of the 90mn power consumers that will be eligible to stop purchasing power from local distribution companies by 2026 with power bills that average R150/month. In the first year of the full market liberalization, 25pc of the all the market will opt out of the regulated market, starting with the higher-income households, Luz said.
To focus on this clientele, Delta is "exchanging its suit and tie for sneakers and jeans," the company's regulatory and institutional vice-president Luiz Fernando Leone Viana said. Delta hired Rafael Maia, a publicist who worked for tech start-ups in the services and human resources industries, to lead Luz. Maia said he will will bring mass marketing strategies, workers from outside the power industry — such as those from the telecommunications, software and retail industries — and add layers of technology to reduce client acquisition costs for power traders, currently used to VIP services for industrial consumers with power expenses higher than R50,000/month.
The first go-to strategy to attract both kinds of consumers will be cutting power expenses, Maia said. Luz promises a discount of up to 30pc on power costs compared with incumbent distributors.
"There will be several ways to attract consumers, but asking 'Why are you paying more for power than you need to?' is the first step," Maia said.
Other traditional traders are keen to get a share of the new market, such as power company Comerc, which also offers services to small businesses and promises a 30pc cost reduction from the regulated market. Retail banks are also eyeing this market, such as Spanish bank Santander, which acquired 65pc of power trader Fit Energy, a digital platform that promises to reduce bills by 12pc for clients that spend R300/month or more on power.
Solar power is a key part of these companies' strategies, using a cooperative model that is still free of transmission and distribution charges and free of surcharges, such as those charged to power consumers to pay for thermal generation dispatch to secure the system, among others.
Traditional power distributors are also looking at the new market. But antitrust watchdog Cade should impose limits for traders, one trader told Argus, since those companies have valuable information on consumers and could reap unfair advantages from that.
