The Provisional Measure (MP) 466/09 is in process at the Chamber, edited by the Executive Branch, which authorizes the electric power dealers and concessionaires that act in isolated systems to be integrated to the National Interconnected System (SIN), by means of purchasing power in auctions regulated by the Brazilian Electricity Regulatory Agency (Aneel).

The purpose is to guarantee the dealers’ transition from the isolated system to the interconnected. The auctions are identical to those accomplished in the famous Regulated Contracting Environment (ACR), a counter where distributors and generators negotiate the power price upon bidding process.

The text establishes that the distributors of the isolated systems will have to abandon generation activities and power transmission within 18 months from the date of interconnection to SIN. The non compliance of the PM rules may submit the distributors to penalties predicted in the electrical industry law.

Specific markets
Currently, the Brazilian territory is almost entirely interconnected by power networks, something that increases the supply security and the efficiency of resources’ management and energetic sources. The only exception occurs in the North region states, where municipalities are attended by isolated systems, in which one distributor deals with a specific market, in general, with a few consumers.

According to the government, there are currently 277 isolated systems in the region, attending only 3% of the electric power consumption in the country, in an area which corresponds to 45% of the national territory. The power is produced by thermo-electrical power plants supplied by diesel and fuel oil, more expensive and pollutants.

With the PM, the Ministry of Mines and Energy expects to reduce the size of this isolated market, by integrating it to the rest of the country. However, the government itself advances that some systems will remain isolated in the region of Amazonas.

Tariff’s cost
In order to avoid the tariff’s price to be forbidding to isolated markets’ consumers, today, the cost of oil acquisition is subsidized by means of the Fossil Fuel Consumption Account (CCC), a tariff generated by Eletrobrás that befalls in all of the country's power bills.

The 466 PM maintains the CCC to subsidize both the transition phase of the isolated systems that will be interconnected and those that will remain active. But it provides a new methodology to enclose concessionaires’ costs that today, according to the Executive Branch, are not included in the computation of subsidy and are sustained only by the companies. In the end, the CCC should cover, for every distributor, the sum of the power purchase costs in the ACR and the power generation costs in the isolated systems.

Reimbursement
There are more news in the text sent by the government: in order to counterbalance the decrease of ICMS collection on the consumption of fuels used in the thermo-electrical power plants, the PM 466 obliges the distributors all over the country to collect 0.3% of the net operating revenue for the National Treasury, between January 01st, 2010 and December 31st, 2012.

The resources will be used to reimburse states and municipalities, and to be applied in programs of electric power integration, socio-environmental projects and payment of power bills of state and municipal bodies. After the end of the collection obligation, the eventual positive balances will be returned to distributors.

In process
The PM 466 will be in force until November 30rd , will be analyzed in the Chamber’s Floor. The Deputy João Carlos Bacelar by the Republic Party of Bahia (PR-BA) is the rapporteur. From September 17th on, there is a closure in the agenda of the House, where the agenda is in process.

Reporting – Janary Júnior
Translation - Grupo Solucion-SP Language/Maria Carolina M. Ogata