The reform of the electricity sector is moving forward with a proposal circulating among industry players. Among the provisions is the opening of the energy market for all consumers starting in 2028 and the end of discounts for the consumption of renewable sources, including self-production, after the end of current contracts. If it is sent to congress, the text may be modified.

According to the draft, the choice of electricity supplier will be free for consumers served by voltage below 2.3 kV starting on March 1, 2027, in the case of industrial and commercial consumers and starting on March 1, 2028, for other consumers.

In addition, the plans would also relax, through regulation, the obligation for consumers to contract energy to meet their entire load, currently subject to penalties for non-compliance. At the same time, it creates the role of supplier of last resort, which would be responsible for ensuring the continuous supply of electricity — with the rules for exercising this activity to be defined by the granting authority by July 1, 2026.

End of discounts and changes in the self-production of renewables in the free market

The production and consumption of energy from hydroelectric plants of up to 5 MW and solar, wind, biomass thermal and qualified cogeneration plants with capacity between 30 MW and 300 MW have a 50% discount on the rates for use of the electrical transmission and distribution systems, whether for commercialization or self-production, as established in article 26 of law 9,427 of 1996.

The draft reform proposes that these discounts be applied exclusively until the end date of the current contract. It also prohibits the application of discounts to consumers through contract amendments or clauses of indefinite duration, contracts not registered with the Chamber of Electric Energy Commercialization (CCEE) or contracts registered after thirty days of the publication of the new law. In addition, the text of the bill would also prohibit the application of TUSD discounts from these plants to consumers served exclusively at a voltage equal to or lower than 2.3 kV.

Self-production by more restricted equivalence

The draft of the electricity sector reform bill also narrows the cases in which consumers can be equated to self-producers, now equating only the consumption unit with aggregate contracted demand of 30 MW or more that participates in the share capital of the company holding the concession.

In the case in which the non-voting shares issued by the company holding the concession grant shareholders greater economic rights than those of the voting shares, the minimum participation of the economic group of each shareholder must be at least 30% of the total share capital of that company.

According to the proposed draft, these limits on contracted demand and share capital would not be applied to consumption units that have already been equated to self-production or that have filed a request for approval of an act of economic concentration with the Administrative Council for Economic Defense by the date of publication of the law.

The self-production by matching model motivated most of the transactions in the centralized solar generation segment in 2024 and was criticized by the Minister of Mines and Energy.

Changes in energy tariffs

The draft also establishes changes in the apportionment of tariffs levied on free and captive consumers. The energy tariffs of Angra 1 and 2, for example, would be apportioned by all energy consumers, including those in the free market, except low-income residential consumers. Currently, they are paid by all captive consumers.

Low-income families would also benefit from the creation of a social tariff, which grants free tariffs in cases of consumption of up to 80 kWh per month. The measure could benefit around 17 million families, with 4.5 million families having their electricity bills completely eliminated. Families with incomes between half and one minimum wage per capita would be granted a social discount, with exemption from the Energy Development Account (CDE) for consumption of up to 120 kWh per month.

In addition, it determines that the financial effects of over-contracting or involuntary exposure by distributors will be shared among all consumers through a tariff charge.