Have you ever noticed an increase in your energy bill and wondered what it means? Well, this “extra” could be the result of tariff flags, a system created by ANEEL (National Electric Energy Agency) to indicate the real cost of generating electricity month by month. Implemented in 2015, the system works as a kind of “traffic light” for the consumer, signaling when energy generation is more expensive or cheaper.
But how exactly does this system work and why does it have such an impact on the value of your energy bill? We'll explain everything about tariff flags, how they are defined and what you can do to avoid being caught by surprise at the end of the month!
What are tariff flags?
Tariff flags are a way to make the cost of the electricity you consume more transparent. Before the system, increases (or reductions) in generation costs only appeared in the annual tariff adjustment — that is, when you had already paid for months on end without knowing it.
With the flags, the transfer is monthly and indicated by colors on your invoice. The system was established by Resolution No. 547 of the ANEEL, in May 2013, tested until the end of 2014 and officially came into force in 2015. Since then, it has become part of our vocabulary and also our pocketbook.
How do tariff flags work?
The flags function as a traffic signal:
- green flag: everything is fine with the power generation. There is no additional cost;
- Yellow flag: less favorable conditions. Increase of R$ 0,01885 per kWh consumed;
- Red flag – Level 1: more expensive generation. Increase of R$ 0,04463 per kWh consumed;
- Red flag – Level 2: very expensive generation. Increase of R$ 0,07877 per kWh consumed.
These amounts are charged according to the monthly consumption of your home or business. The higher the consumption during red flag periods, the higher the bill.
Who defines the color of the tariff flag?
Every month, the ANEEL defines the current tariff flag, based on a series of technical information. Among the data analyzed are:
- The PLD (Price for Settlement of Differences), which reflects the cost of energy in the short-term market;
- The number of thermal plants in operation — the more thermal plants are activated, the higher the generation cost;
- The relationship between the energy generated by hydroelectric plants and their total capacity, which indicates the level of water availability;
- Technical data provided by ONS (National Electric System Operator) and by CCEE (Electric Energy Commercialization Chamber);
- The tariff coverage of distributors, that is, how much of the expenses are already covered by the tariffs in force.
Based on these factors, the ANEEL decides which will be the flag of the month and informs the market. Distributors, in turn, include this information on consumers’ invoices.
Are flags a new cost?
This is a common question — but the answer is no. Tariff flags do not represent a new cost, but rather a new way of presenting a cost that already existed. Previously, increases were diluted in the annual adjustment. With the flags, the consumer can see, month by month, whether energy is more expensive or cheaper, and has the chance to adjust their consumption in real time.
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Who pays the tariff flags?
The system applies to all captive consumers of distributors connected to the SIN (National Interconnected System). Only consumers of isolated systems, such as some locations in the North region, are excluded. Some exceptions have discounts on the flags, such as:
- Low-income families ed in the Social Electricity Tariff;
- Producers who use energy for irrigation or aquaculture at special times
What is the difference between tariffs and tariff flags?
Rates are the base value of the electricity bill — and cover the costs of generation, transmission, distribution and sector charges. Tariff flags are an addition or not to the tariff value, depending on the generation conditions in the month. They are basically a monthly adjustment tool for the variable cost of energy generation.
Why is knowing the color of the flag important?
Knowing what the monthly tariff flag is allows you to have more control over your consumption and your bill. If the flag is red, it is a sign that the cost of generation is high — and it is time to review habits, reduce the use of electrical appliances and avoid waste. Furthermore, when millions of consumers make this collective adjustment, there is a direct impact on the electrical system: lower consumption, less need to activate thermal plants, lower costs for everyone.
Be aware of tariff flags
Tariff flags are an important tool for transparency and awareness. They not only help to understand the real costs of electricity, but also give consumers the power to react to these costs with more informed choices. If you want to go further and protect yourself from flag variations, it is worth considering alternative sources, such as solar energy. In addition to reducing your electricity bill, you are less exposed to fluctuations in the traditional system — and you also contribute to a more sustainable future.
