It is nothing new that every innovative business activity almost always has the arduous mission of opening new paths and demystifying what remained untouched until a certain time.
It is inevitable that the disruption of a market causes eventual confrontations between those who see themselves as “holders” of a certain custom [1] and those pioneering a new practice.
Coincidence or not, one of the meanings of the word disruption is the abrupt restoration of electrical energy that causes sparks and enormous consumption of accumulated energy [2].
It fits like a glove with what we see today in the DG (distributed generation) sector, in the fight between distributed generation entrepreneurs and electricity distributors.
Despite the sparks created by the fight between DG players and distributors, at least part of them could be avoided with the help of ANEEL (National Electric Energy Agency), in fulfilling its role of regulating the market, which is done in the first instance through clear, objective and cohesive standards with the Brazilian legal system.
This article aims to express our opinion on the gap left by §3°, of article 4°, of REN 482 (Normative Resolution No. 482/2012) of the ANEEL, by not defining criteria for the interpretation of the expression “division of generating plant into smaller units”, which brings legal uncertainty, in addition to illegal arbitrariness on the part of the distributors, who were left with the duty, not an easy one by the way, to monitor these cases and even deny hip of the SCEE (Electric Energy Compensation System).
But don't be fooled by this victimization, because that's exactly where the danger lies, because while the ANEEL not fulfilling their regulatory role, distributors will use their role as victims in this relationship that exists in the distributed generation sector, to monitor in their favor – as a market reserve – situations that could be interpreted as the division of generating plants into smaller units, and even “legislating” on the matter.
Official documents issued by SRD/ANEEL
Over the last few years the ANEEL, through the Superintendence of Regulation of Distribution Services, responded to several queries made by consumers and electricity distributors, related to the subject of the division of generating plants. These queries involved real cases of the most diverse nature.
When analyzing the responses that were given to these letters, we can notice that there is no uniformity on the part of the SRD regarding the understanding of what is or is not permitted to be done in of project formatting, and which can be interpreted as a division of generating plants in disagreement. with the resolution 482.
For the legal operator, the arguments brought in the respective letters to determine when and how resolution 482 was breached with regard to the attempt to divide smaller generating plants for the purposes of framing the power limits for microgeneration or distributed minigeneration stand out.
One such example is Official Letter No. 0377/2019-SRD/ANEEL, who analyzed one of the situations as follows:
"Regarding Case 1 (…), the fact that there were 8 access requests totaling 20 MW of generation on the same land indicates that the division of plants into powers lower than the limits of 5 MW for minigeneration was a investors' decision, as it would be technically viable to install only a 20 MW plant, but intended for the sale of energy on the free market or participation in energy auctions on the regulated market. This way, even if there is division of land and different owners in each consumer unit, inclusion in the Electricity Compensation System is prohibited, as provided for in art. 4th, §3 of REN nº 482/2012. "
In one fell swoop ANEEL managed to violate the Federal Constitution three times:
- A free Initiative, as it understands that investors would have the possibility of installing a single 20 MW plant and ing the free market or participating in energy auctions in the regulated market. For this strange reason, it prohibits them from operating more than one 5 MW plant in the distributed generation market;
- A social function of property, as it prevents a certain area from being used for distributed generation, even if the area is divided into different owners, if there is installed power greater than 5 MW around it; and
- A isonomy, as different holders would be prevented from exploiting their property for distributed generation purposes due to the fact that there are already other projects around, which together exceed 5 MW.
With this statement the ANEEL Perhaps you have not realized that you are restricting the freedom of entrepreneurs to choose which market to operate in, that the owner of a certain area does not have the freedom to explore his property as he sees fit, within the limits of the law, and that pioneering the exploration of distributed generation activity in a certain region impedes the right of other neighbors to operate in the same segment, giving more rights to some than to others. This is illegal and completely outside the sphere of competence of the ANEEL.
Regulation by distributors
As stated initially, the blame for this David and Goliath struggle over what it means to divide generating plants into smaller units lies with ANEEL.
It is to be expected that David will be crushed, as the “judge” of this fight is Goliath himself, who has the supposed “burden” of identifying when attempts at division occur in non-compliance with resolution 482, but the rule itself does not bring any list of criteria, neither objective nor subjective, in this sense.
And that is precisely why there are initiatives like Cemig's, to create coercive rules and traps to be used against distributed generation entrepreneurs, which are completely illegal.
Cemig prepared the Normative Legal Opinion JE/DE N° 033/2019, which brought supposedly objective parameters to evaluate the compliance of requests from applicants for distributed generation with the regulatory prohibition on dividing a generating plant into smaller units to fit within the limits of power for distributed minigeneration.
In brief, s are segregated into 3 different groups:
- In the first group, it must be evaluated whether access requests with geographic coordinates within the same municipality or in neighboring municipalities exceed the power limit for microgeneration or distributed minigeneration in contiguous areas of the same or different ownership as long as they belong to partners in groups of common interest;
- If contiguous areas are not considered, a second group must be analyzed: dismemberment of plots of land into smaller plots of land, in which there is more than one access request from the same applicant (same F or CNPJ) or from those belonging to groups of common interest that go beyond the power limit for microgeneration or distributed minigeneration;
- And a third group to be evaluated by the distributor together with the first two groups: applicants whose geographic coordinates are located in the same municipality and who have distributed generation access documents.
To facilitate the work of its employees, Cemig's normative opinion includes up to a check list, as per the flowchart below:
Preliminarily, it is important to highlight that Cemig's practice is illegal, as with this document it intends to legislate [4], for which it has no competence. In the aforementioned opinion we can observe two main illegalities, as its criteria are not fixed in any standards, much less in resolution 482.
The first, due to the fact that Cemig carries out analyzes of a corporate nature, and if it is understood that the holders belong to groups of common interest, they would be denied access to the network for the connection of distributed generation systems that together exceed 5 MW. The second, due to the interpretation that the 5 MW limit is not only on contiguous land, but also at the level of the municipal perimeter.
As if this anomaly created by Cemig were not enough, it has required consumers to sign a declaration form when requesting access, which aims in popular jargon to create the cat bed.
The respective term is not included in the exhaustive list of REN 414 (Normative Resolution nº 414/2010) of documents that the distributor can request from the accessor, which in itself is already illegal.
In this term, the consumer must declare:
- That the property where the consumer unit is located is not the result of recent property dismemberment;
- That the company does not have a micro or mini generating plant or requests or access opinions from Cemig whose combined powers exceed 5 MW;
- That the company does not have a corporate relationship with other entities, which together have micro or mini generation of more than 5 MW; and
- That the electrical interconnection of distributed generation installations served through different connection branches is prohibited.
If the respective term is not signed, the access request is not accepted, hindering the consumer's right to access Cemig's network.
Worse than that, companies have been notified by Cemig that consumer units will be disconnected due to the fact that it has been identified that there are already connections exceeding 5 MW in the same municipality and/or belonging to the same business group.
This is not only a faulty act but it is a cat's litter. In fact, it is worthy of a red card and suspension from playing the entire season resulting from the bad faith implicit since the conception of the orchestrated trap.
istrative proceedings before the ANEEL
At least two istrative processes discuss the topic set out in §3, article 4, of resolution 482.
One of them is process no. 48500.004024/2017-80, whose istrative appeal aims to review ENEL-CE's fine for improperly connecting two wind energy generating plants of 5 MW each in contiguous areas, and for carrying out the division of 19 generating plants of 55 kW, totaling a total installed power of 1.060 kWp, a project developed by Prátil, controlled by the Enel Group, and whose projects were intended for remote self-consumption of pharmacies in the Pague Menos group.
Despite this being the first inspection carried out by ANEEL in this sense, in our view, the decision handed down does not form case law, as the factual aspects of these two cases are very specific, and do not have the power to guide what should be interpreted as the criteria for dividing smaller generating plants.
The other process is No. 48500.006591/2019-32, which aims to suspend the application of the criteria and guidelines contained in Normative Opinion JE/DE No. 33/2019, still pending decision, but which has already managed to provoke the Cemig to revoke its opinion.
However, s are still required to sign the declaration form, as per the previous topic, to make an access request, which must be immediately rejected by the ANEEL.
Conclusion
There are certainly distributed generation entrepreneurs who are circumventing resolution 482 to achieve advantages that generally do not exist, such as avoiding the cost of minimum contracted demand, connection costs, tax optimizations, among others.
On the other hand, distributors have also given interpretations without any legal basis with the sole objective of denying distributed generation connection to those who are complying with the standard.
It is also worth mentioning that after the opening of public consultations no. 10/2018 and no. 25/2019, ANEEL received several contributions and complaints on the subject of dividing smaller generating plants, including from the firm Tribuci Advogados – but so far the ANEEL was absent from facing.
And that is why the ANEEL is responsible for this entire situation, because while it does not define which criteria are to be analyzed for the purposes of classifying the division of smaller generating plants, the conflict between distributed generation entrepreneurs and distributors will continue, and will have to, once again, be pacified in the judiciary, when in fact it is its responsibility, under the of Law No. 9.427/1996, which instituted the ANEEL.
References
- Brazilian Dictionary of the Portuguese Language. Michaelis. Editora Melhoramentos, 2021. 1. Usual tradition or frequent practice
- https://michaelis.uol.com.br/moderno-portugues/busca/portugues-brasileiro/disrup%C3%A7%C3%A3o/
- § 3 The division of a generating plant into smaller units to fit within the power limits for microgeneration or distributed minigeneration is prohibited, and the distributor must identify these cases, request readjustment of the installation and, if not met, deny hip to the System of Electrical Energy Compensation
- The opinion in its conclusions states: 34. In view of the above, we express our understanding, of a normative nature and general guidance to the company's bodies, that there is a legal and regulatory basis for Cemig D to use objective parameters in order to standardize its understanding of the compliance of requests from applicants for distributed generation with the regulatory prohibition on dividing a generating plant into smaller units to fit the power limits for distributed minigeneration (§3 of art. 4 REN 482/2012)
