The TCU (Federal Audit Court) concluded that there is no strategic contingency plan for critical situations, on the part of the government and bodies in the electricity sector, to face the energy crisis.
According to the Audit, the measures adopted were taken in a “hasty” manner, with little predictability and no estimate of tariff impacts on the consumer.
“Flaws were found in the planning of actions, which focused on increasing energy supply, without due attention to measures to reduce demand,” said the TCU report, authored by Minister Benjamin Zymler.
Furthermore, the Authority identified that there was no investigation of the structural and cyclical causes that contributed to the hydroenergy crisis.
The conclusions are part of an inspection carried out by the Court to monitor and evaluate the government's actions in the face of the 2020/2021 energy crisis. Monitoring was carried out between June and December 2021.
The MME (Ministry of Mines and Energy), in response to such considerations from the TCU, commented that it is analyzing the report and is in conversations with the court to clarify all the issues raised.
Failures
In addition to the flaws highlighted in the execution and communication of the measures adopted from a demand perspective, a failure was reported in the simplified and emergency energy auction, which contracted energy at a cost of R$39 billion. According to the Audit, it was carried out in a shorter time than would be recommended.
“Incurring several risks to its success, considering that the schedule
forecast indicated that the winners should sign their contracts in November 2021 to put the projects into operation on 01/05/2022”, the report pointed out;
Penalized consumer
Regarding the estimation of tariff impacts of the measures adopted to face the crisis, it was verified that the impact of the decisions taken so far implies a high cost for the consumer.
Furthermore, it was found that the measures were implemented without the necessary advance prediction of the tariff impacts on consumers.
As reported by Canal Solar, the Government's emergency actions to avoid energy rationing, for example, culminated in increase in electricity bill of Brazilians.
In understanding the ANEEL (National Electric Energy Agency), the adjustment was necessary to compensate for the cost of exceptional measures, such as activating thermal power plants.
Read more: Electricity bill will be more expensive in 2022, reports ANEEL
In fact, this increase, driven by the water crisis, should cause the loss of around 290 thousand jobs in 2022, according to a study published by the CNI (National Confederation of Industry).
MP 1.078 / 2021
The TCU also commented that it was necessary to that the MP 1.078 / 2021 not only authorized the contracting of a financial operation to cover financial impacts arising from the situation of water scarcity, “but also included in its scope deferrals applied in tariff processes prior to the release of resources from the financial operation”.
“Consequently, in some way, an accumulation of tariff increases is beginning to form due to previous tariff processes, the Covid and decisions taken during the hydroenergy crisis”, added the research.
Structural causes
Regarding structural causes, the audit team said that on repeated occasions, it questioned those responsible about the reasons – in addition to negative hydrology – that contributed to the worsening of the crisis.
“However, the responses demonstrated that there has not yet been a detailed study on the matter, nor is there a consensus on the subject, which could make it difficult to successfully identify the necessary interventions to be carried out and a supervening public policy for the sector”, they emphasized.
Determinations and recommendations to the MME
The Federal Court of Auditors, at the end of the report, gave some determinations and recommendations to the MME.
Determinations
- Develop a strategic contingency plan to face hydro-energy crises;
- Prepare a study to identify and propose solutions for the causes that led to the risk of imbalance between energy demand and supply;
- Present an assessment of the advantage of a new credit operation for distributors when using RTEs (Extraordinary Tariff Revisions) and carry out a study on the advantage of including tariff deferrals;
- À ANEEL, define a mechanism that has the “ability to maintain an economic signal of the price of energy for the consumer of electrical energy”.
Recommendations
- To the MME, carry out a study to individually evaluate the cost-effectiveness and effectiveness of the measures adopted to face the crisis and evaluate the results obtained by the Incentive Program for the Voluntary Reduction of Electricity Consumption, in particular regarding billing errors that may have been committed;
- À ANEEL, to analyze the results of the Voluntary Consumption Reduction Program using concepts of behavioral economics.
