Free energy market: understand the new rules

The free energy market began to have new rules as of January. Ordinance 50/2022, published by the Ministry of Mines and Energy, allowed the migration of all high voltage consumers (Group A) to the free energy contracting environment, unprecedentedly changing the profile of the free consumer after 20 years of its creation .

For Lívia Amorim, partner in the energy area at Veirano Advogados, this change in the consumer profile had been expected by the sector for years and aroused the interest of the retail trade. “Now consumers with demand above 75 kW, but less than 500 kW, will be able to purchase energy on the free market, as long as they are represented by an agent at the Electric Energy Trading Chamber (CCEE)”, she explains. “The measure should favor competitiveness in the sector by providing access to other energy suppliers”, adds Lívia.

With the entry of new consumers, there will be changes in the structure and dynamics of this market in several aspects. One of them is membership of the CCEE, previously optional. It is no longer permitted for consumers with a load of less than 500 kW, and must be represented by a retail agent.

Another new feature is that retail consumers can notify the distributor of their interest in migrating to the free energy market at any time. Previously the deadline was at least 180 days before the end of the contractual term.

According to Juliana Melcop, partner in the Energy practice, the distributor's return to the market remains optional before five years, and the concessionaire may charge the consumer the value of the Difference Settlement Price (PLD), instead of the applicable tariff, if the former is higher. “This mechanism avoids losses to the distributor’s cash flow and to other consumers in its market”, he comments. At the same time, however, it creates obstacles for the return of consumers who, for whatever reason, wish to return to the regulated environment. “Consumers who choose to migrate to the ACL must be careful to plan ahead to avoid scares with price fluctuations, as returning to the regulated market before the five-year period will be at the discretion of the local distributor.”

“In general, the regulatory changes represent an improvement for this new stage of the free energy market. It will be necessary to follow the next steps to understand the sector’s behavior in the face of all these changes”, he concludes.

About Veirano Advogados  

With a team of more than 600 professionals, including 91 partners and more than 280 associates, Veirano Advogados is recognized by the main sector publications as a top-tier Brazilian law firm and was the first Latin American firm to receive the Chambers Client award Service Law Firm of the Year Award.

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