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Brazil: Expansion of the free market - is it good?

image credit: Power prices, rates and cost references in Brazil

Brazil: Expansion of the free market - is it good?

Bill is pending at the Brazilian Congress to expand consumer access to the deregulated power markets for the "low voltage" market.

Currently, only consumers with contracted demand above 500 kW - size of medium-sized companies and institutions (that pay more than USD 50,000/month of electricity) may contract in the free markets.

Of course, more choices is excellent.. But in practice it is not quite like that. The free market (1) requires more control on the part of the customer, (2) there is a management cost that the trader charges that must be considered and (3) the risks of free prices must be mitigated.

It happens that low voltage consumers pay somewhere in the range of USD hundred(s) per month. So it is unlikely that all this "gymnastics" associated with the free market is worthwhile in relation to the regulated rates which are very easy and simple.

Rafael Herzberg's picture

Thank Rafael for the Post!

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