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Electricity bill portability (Brazil)

Electricity bill portability (Brazil)
rafael.herzberg@gmail.com

Installed, on October 23, in the Chamber of Deputies, Special Commission responsible for the analysis of Bill 1917/2015, which deals with the portability of the electricity bill - the right of all Brazilians to choose their energy supplier.

The principle is great, of course as it would allow small consumers (homes and small businesses typically) to choose their supplier (just as "large" energy users can already) in the free power market.

But....the free market in Brazil is still systemically "stuck". The USD 2 Billion default by CCEE, the official "clearinghouse" valued at $ 7 Billion is a theme that has been unsolved for years, aggravating costs and increasing perceived risks.

What should be preferred: open a new "solved" alternative or start "anyway" with deep unsolved problems by placing energy supply and demand in the face of regulatory uncertainties?

Rafael Herzberg's picture

Thank Rafael for the Post!

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Matt Chester's picture
Matt Chester on Nov 11, 2019 1:30 pm GMT

But....the free market in Brazil is still systemically "stuck". The USD 2 Billion default by CCEE, the official "clearinghouse" valued at $ 7 Billion is a theme that has been unsolved for years, aggravating costs and increasing perceived risks.

So what will be the unintended ill effects of allowing the small consumers to newly choose their power provider?

Rafael Herzberg's picture
Rafael Herzberg on Nov 11, 2019 6:43 pm GMT

Matt this is a very good question! 

For my industrial/commercial clients - "large" energy users - it is possible to mitigate the clearinghouse's default by taking specific measures (see at the end my PS) basically because we are talking about big dollars at stake and so it is easy to set up procedures and make sure that they avoid extra costs.

When it comes to "small" energy users these (above mentioned) procedures are a real pain because we are talking about home owners and small enterprises. Most probably there are no "professionals" to handle properly the default related issues. So the bottom line - it can easily bercome more expensive than the regulated rates.

PS Siince the clearinghouse (CCEE) is in a weak situation I have advised my consulting clients to NOT let surplus energy (contracted volume above physical recorded volume on a given month) be settled at CCEE simply put because they might not pay right away the corresponding value. It may take years! So I recommend that they negotiate the difference directly with a power trader as opposed to letting automatically be "transacted" by CCEE. It becomes more complicated and most importantly the power traders charge a spread (of course!) which is an additional cost that should de included in the evaluation regulated x deregulated options.

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