Brazil's power market participants are pushing for congress to approve an electric sector modernization bill in the next two months, hoping to keep the transition to a more competitive market on track.
The sector worries the proposed legislation, known as PL414, may never be approved if it is not voted on before May, when lower house members begin campaigning for an October election. Market participants also worry there may be an "amendment war," with legislators seeking to add provisions that benefit their constituencies.
Lower house congressman and former mines and energy minister Fernando Coelho Filho (MDB-PE) drafted the proposal and is pushing for fast approval. He intends to retain the goals of the ministry of mines and energy's original proposal, CP33, which aims to avoid cost increases for consumers.
But some question Coelho Filho's ability to avoid making political concessions to get the bill approved. Some lawmakers want to add gas pipeline construction costs into the energy surcharge, as suggested in a law clearing the way for the privatization of state-owned electric company Eletrobras. An agent participating in the parliamentary negotiations for the bill described Coelho Filho as "very pressured" to include amendments to the text, which could increase costs for power consumers.
One of the most criticized points of the current proposal is the timeframe in which all power consumers could freely choose a power supplier different than the local distribution company. Consumers would have up to 42 months after the proposal's approval to be able to choose, but distributed generation supporters want that lengthened to 80 months.
Another point of tension is a proposed rules change that would benefit large consumers that generate their own energy under self-supply agreements, as it would come at the expense of smaller consumers and generators. Coelho Filho's bill also facilitates the renewal of concessions for distribution companies, reducing payments with grants for the federal budget.
The strategy for approving the project more quickly is to avoid treating it as a new text, and instead to make changes to an approved senate bill. Coelho Filho has not officially published the new text but has circulated a document via WhatsApp. He expects the project to be declared as "urgent" in March, which would allow for a direct plenary vote no later than the second week of April followed by a senate vote before the electoral campaign period starts in May.
