Decree regulates bidding and extension of transmission concessions

Regulation contributes to a safe investment environment and reduced fees, says MME
29-12-22-canal-solar-Decree regulates bidding and extension of transmission concessions
According to the MME, the decree benefits consumers by ensuring more competition in concessions. Photo: Freepik

It was published, this Thursday (29), the Presidential Decree 11.314/2022, which regulates the bidding and the extension of concessions public service of electrical energy transmission at the end of its validity.

According to MME (Ministry of Mines and Energy), the regulation favors the bidding of concessions, seeking economic efficiency and reasonable tariffs. “The price of the service will result from a competitive process, based on the criterion of the lowest annual revenue value, for the benefit of all s of the system”.

With the new rules, transmission facilities for expiring concessions may be tendered in conjunction with new investments foreseen by sectoral planning.

“This increases the attractiveness of the bidding and gains for s of the transmission network. Furthermore, compensation for unamortized assets will be paid by the winner of the auction to the old concessionaire, as a condition for g the new contract”, highlighted the MME.

The bidding model is similar to that already adopted for the transmission assets of the former Amazonas-GT and for the facilities associated with the Garabi 1 and 2 Converter Stations. The concessions were awarded at discounts of 47,4% and 34,21% , respectively, saving R$3,5 billion for s of the transmission network and consumers of electricity.

The decree also provides for the possibility of extending concessions when the bidding process is unfeasible or results in harm to the public interest. In this case, the extension must be justified by the ANEEL (National Electric Energy Agency), with prior specific public consultation.

“The renewal of transmission contracts, in addition to providing a reduction in tariffs paid by consumers and electricity generators, will be an opportunity to redesign concessions, increasing their technical and economic efficiency, and maintaining the quality of the service provided”, they added.

The topic was discussed in Public Consultation No. 136/2022, between September 23 and October 24, 2022, and received contributions from 18 companies and institutions. The guidelines that underpinned the decree were defined with the of ANEEL.
The presidential decree prepares the electricity sector for the expiration of several transmission concessions that will reach their contractual term from 2025 and mainly from 2030 onwards.

“The regulations provide a safe environment for investments and add transparency and predictability to the renewal of concessions, with a focus on reducing tariffs paid by electricity consumers”, concluded the Ministry.

Photo by Mateus Badra
Mateus Badra
Journalist graduated from PUC-Campinas. He worked as a producer, reporter and presenter on TV Bandeirantes and Metro Jornal. He has been following the Brazilian electricity sector since 2020.

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