TCU Proposes to the Ministry of Mines and Energy to End the Hiring of Natural Gas Thermoelectric Plants Foreseen in the Privatization of Eletrobras

The TCU Concluded That There Is No Technical Support, In Addition to Environmental Consequences, in Hiring Natural Gas Thermal Plants. The Agency Suggested to the MME the End of Auctions for Contracts Provided in the Eletrobras Privatization Law.

The Federal Court of Accounts (TCU) suggested to the Ministry of Mines and Energy (MME) this last Wednesday, (01/25), the end of auctions for hiring natural gas thermal plants provided in the privatization of Eletrobras. The agency proposes not to hire part of the agreements proposed in the company’s privatization law. According to it, there is no technical support for this, in addition to possible severe environmental impacts to ensure the development of the projects.

Due to Lack of Technical Support, TCU Suggests to the MME Not to Hire Part of the Natural Gas Thermal Plants Imposed by the Eletrobras Privatization Law

Amid inconsistencies in the national energy market with the transition of the new Lula Government, new discussions have arisen in the segment.

The TCU recommended to the MME an evaluation of the legal possibility of not hiring part of the natural gas thermal plants imposed in the Eletrobras privatization bill.

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The court assessed all scenarios and concluded that, even provided for in the privatization project, the compulsory hiring of 8 GW of thermal plants lacks technical support.

This is because the installation of the structures is planned for areas in the interior of the country, which are not currently served by gas pipelines.

Furthermore, the TCU found in its recommendation to the MME that the initiative violates legal and constitutional principles governing public administration and the electricity sector, such as efficiency, consumer protection, and free competition.

The rapporteur of the document sent to the ministry, Benjamin Zymler, pointed out the lack of studies on the tariff consequences of hiring the thermal plants as one of the main points to be considered.

The possible environmental impacts caused by the construction of gas pipelines for hiring the natural gas thermal plants provided for in the privatization of Eletrobras must also be observed in the project.

He also pointed out that there are no clear criteria for dividing how many gigawatts will be contracted in each region.

“The Legislative Power has ended up entering a technical area that belongs to the MME, to Aneel [National Electric Energy Agency]: the idea of regulating the electricity sector,” concluded the TCU representative, Zymler.

Court of Accounts Lacks Authority and Power to Suspend the Hiring of Thermal Plants Provided for in the Eletrobras Privatization

The rapporteur stated that the TCU has limits of competence to deal with the matter. Although it can suggest changes and new assessments regarding the Eletrobras bill, the agency’s power ends there.

He further highlighted the understanding of the Minister of the Supreme Federal Court (STF), Alexandre de Moraes, that it is not up to the agency to exercise diffuse control of constitutionality in the processes under its analysis.

“If I were in the position of the MME, I would be absolutely tempted to seek in each concrete case the non-application of the literal wording of the law. But I cannot impose on them what I imagine I would do,” stated the rapporteur.

The TCU will also inform the Federal Public Ministry (MPF) of the possible consequences of hiring the thermal plants provided for in the Eletrobras privatization law.

The agency aims to evaluate the possibility of filing a Direct Action of Unconstitutionality (ADIN) in the STF questioning the Eletrobras privatization law.

Despite the TCU’s efforts, nothing is guaranteed about the future of the hiring of the thermal plants provided for in the Eletrobras privatization project.