Aneel Approves New Energy Distribution Contract for 19 Companies, Extending Concessions Until 2031

The Aneel has approved a new distribution contract for 19 energy companies, extending their concessions until 2031. The contract includes conditions for service provision, penalties for non-compliance, and recognition of "severe operational restrictions" areas where companies struggle with high non-technical losses. The approval allows the government to proceed with the renewal process, which includes companies that have underperformed in recent years. The first company to sign the new contract will be EDP, with its concession in Espírito Santo expiring in July.

The Brazilian energy regulatory agency, Aneel, has recently approved a new distribution contract for 19 electricity companies, extending their concessions until 2031 [1]. This decision allows the government to proceed with the renewal process, which includes companies that have underperformed in recent years.

The new contracts incorporate conditions for service provision, penalties for non-compliance, and recognition of "severe operational restrictions" areas where companies struggle with high non-technical losses [1]. These measures aim to promote efficiency and reduce energy wastage.

The first company to sign the new contract will be EDP, whose concession in Espírito Santo is set to expire in July [2]. EDP's renewal is significant as the company accounts for a substantial portion of the domestic market and serves 55.6 million consumer units [2].

The Energy Efficiency Program of Electricity Distribution Companies (PEE) was introduced in Brazil in 2000, requiring electricity distribution companies to invest 0.5% of their net operating revenue in energy efficiency measures [1]. Since then, the program has resulted in numerous energy-saving projects, totaling 4,850 concluded projects, 63 TWh of energy savings, and 2,8 GW of avoided peak demand [1].

The recent contract renewals are expected to have a positive impact on the energy sector, ensuring the continuity of electricity services and promoting the efficient use of energy resources. The public consultation for the proposed guidelines ended on July 24, and the government is yet to provide details on the required "social compensation" from companies to renew their contracts [2].