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Is the Brazilian power sector out of control?

image credit: Wake up call
Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

  • Member since 2003
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  • Jun 1, 2020

Is the Brazilian power sector out of control?

For those who analyze the electric sector looking at the regulation, in official companies and institutions, the assessment can only be of institutional strength, predictability and legal security.

However, there is a worrying signal. The sector is based on an untied foundation of the competitive world: it is a permanent transfer of costs to the customer, whether residential, commercial, industrial or institutional.

Taxes, subsidies, incentives, power theft (delicately referred to as "non-technical losses"), official defaults are all transferred to the tariffs.

On the other hand, energy companies controlled by the State (Federation and States) are in a very weak financial/economical situation and unable to invest to expand their businesses..

An emblematic example of this situation is the recent statement by the governor of Minas Gerais, who, in an interview, declared that CEMIG did not have the resources to invest in the required (electric) access to a foreign industry that wished to settle in the state.

What else will need to happen for us to become aware of the real situation in the electricity sector?

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