As the Brazilian power market prepares for full liberalization, traders are calling for clearer rules from regulator Aneel for their interactions with both power consumers and local distributors.
For starters, Aneel should address the issue of power supply interruption in case of non-payment for free-market retail consumers, power traders told Argus. Rules over the customer migration process must also be addressed, they said, as more consumers opt for the liberalized market in 2024 and 2026, depending on minimum consumption volumes.
The electric energy trading chamber (CCEE) estimates that 72,000 power consumers will be able to choose a power trader from January 2024 onward.
The first power supply agreement in the liberalized market was struck in November 1999. Walfrido Avila, president of energy trader company Tradener — which mediated that first liberalized market agreement between Parana state power company Copel and petrochemical company Carbocloro — said back then there were few regulations ready, it was difficult to measure power consumption and to conduct financial clearing, among other hindrances.
"The power market now is on the opposite matter, with too much controlling, too much detailing," said Avila. "The new moment of power market liberalization revisits the past moment, with no need for retail power consumers to do physical spot market adjustments and clearing with CCEE, but rather leaving that for traders and local distributors."
Avila also pointed to the changes in responsibilities for traders with the larger market liberalization, because financial responsibilities are accounted for by the trader and not the consumer, a relationship that could use more definition from Aneel.
It also remains unclear how consumers would return to the regulated market, and at which power prices, in the event they fail to pay their bills and get disconnected.
The power market is ready for the expected record number of new free-market clients in January, but regulatory improvements are welcome, said Bernardo Sicsu, strategy and communications vice-president at electricity resellers association Abraceel.
The association is offering input for Aneel on the matter and it is expected the regulator to open a consultation on retail consumer rules in the coming weeks. But Sicsu said that migration is already happening and that consumers who want to be in the free market by January are already dealing with bureaucracy, since distributors demand a six-month notice.
"We are seeking the full liberalization, but this has to be balanced and with clear terms so we can draw a plan," said Sicsu.
