Energy rates are set by ANEEL via periodical procedures established in concession agreements, supported by mechanisms that aim to establish an adequate rate level to guarantee the economic and financial equilibrium of companies at the minimum cost to consumers.
The main rate regulation mechanism is the so-called Periodical Rate Review, which takes place every four or five years at Energisa Group‘s distribution companies. This mechanism essentially aims to re-determine the efficient level of operating costs and investment remuneration.
In addition to this mechanism, every year Ordinary Rate Adjustments are made to adjust rates for inflation and to capture part of the efficiency obtained by the companies as a result of the market growth observed in the period.
In 2016 and 2018 the National Electricity Regulatory Agency (“Aneel”) ratified the 4th Cycle of the Periodical Rate Reviews (“4CRTP”) of nine subsidiaries of Energisa S/A.
The effects for consumers deriving from the latest adjustment process and rate review of each Energisa Group distribution company were as follows:
Tariff Events – Average Effects
|Distribution company||%||Tariff Events||Effective date|
|Energisa Minas Gerais||+ 6.41||Annual Adjustment||6/22/2020|
|Energisa Nova Friburgo||+ 2.39||Annual Adjustment||6/22/2020|
|Energisa Sergipe||+ 1.20||Annual Adjustment||7/1/2020|
|Energisa Borborema||– 1.78||Annual Adjustment||2/4/2020|
|Energisa Paraíba||– 4.27||Annual Adjustment||8/28/2019|
|Energisa Mato Grosso||+ 2.47||Annual Adjustment||7/1/2020|
|Energisa Mato Grosso do Sul||+ 6.90||Annual Adjustment||7/1/2020|
|Energisa Tocantins||+ 7,17||Tariff Review – 5ºC||7/4/2020|
|Energisa Sul-Sudeste||+ 4,87||Annual Adjustment||7/12/2020|
|Energisa Rondônia||+ 0,11||Annual Adjustment||12/13/2019|
|Energisa Acre||– 4,24||Annual Adjustment||12/13/2019|
Regulatory Remuneration Base
The process of valuing assets of the regulatory remuneration base uses the VNR – New Replacement Value, which denotes the value at current market prices of an identical, similar or equivalent asset subject to replacement, which provide the same services and have the same capacity as the existing asset, including all the expenses necessary to install it.
The Regulatory remuneration base consists of the values of the following items:
- Property Plant and Equipment in Service (AIS)
- Buildings, civil works and improvements
- Machinery and equipment
- Intangible Assets – Easements
- Operations Warehouse
- Special Obligations
The net remuneration bases (BRL) of Energisa Group‘s distribution companies and the dates of the next Rate Reviews (RT) are as follows:
Net Remuneration Base (BRL) – Amounts in R$ million
Prices at the Rate Review date
|Distribution company||1st Cycle||2nd Cycle||3rd Cycle||4th Cycle||5th Cycle|
|Energisa Minas Gerais||148.6||170.8||218.3||308.0|
|Energisa Nova Friburgo||42.4||56.5||69.2||95.0|
|Energisa Mato Grosso||490.8||1,032.8||1,693.5||3,459.8|
|Energisa Mato Grosso do Sul||600.3||835.7||1,152.6||1,864.5|
|WACC||17.07 %||15.08 %||11.36 %||12.26 %||11.10%|
Dates and technical notes of the rate reviews
1st to 5th Cycle
|Distribution company||1st Cycle||2nd Cycle(2)||3rd Cycle(3)||4th Cycle(4)||5th Cycle(1)|
|Energisa Minas Gerais||jun/04||jun/08||jun/12||jun/16||jun/21|
|Energisa Nova Friburgo||jun/04||jun/08||jun/12||jun/16||jun/21|
|Energisa Mato Grosso||apr/03||apr/08||apr/13||apr/18||apr/23|
|Energisa Mato Grosso do Sul||apr/03||apr/08||apr/13||apr/18||apr/23|
WACC – Before tax
(1) BRL not ratified by ANEEL, distribution companies have not yet had the rate review in the cycle.
(2) Technical notes of the distribution companies of the 2nd Cycle Rate Review.
(3) Technical notes of the distribution companies of the 3rd Cycle Rate Review.
(4) Technical notes of the distribution companies of the 4th Cycle Rate Review.
(5) Technical notes of the distribution companies of the 5th Cycle Rate Review.
|Distribution company||DRA (1)||DRP (2)||Change
|Energisa Minas Gerais||230.8||236.3||5.5||+ 2.4||Annual Adjustment|
|Energisa Nova Friburgo||48.7||49.9||1.2||+ 2.5||Annual Adjustment|
|Energisa Sergipe||446.6||462.0||15.4||+ 3.5||Annual Adjustment|
|Energisa Borborema||84.8||90.1||5.3||+ 6.2||Annual Adjustment|
|Energisa Paraíba||763.3||820.4||57.1||+ 7.5||Annual Adjustment|
|Energisa Mato Grosso||1.664.9||1.777.2||112.3||+ 6.7||Annual Adjustment|
|Energisa Mato Grosso do Sul||968.1||1.035.1||67.0||+6.9||Annual Adjustment|
|Energisa Tocantins||560.0||641.6||81.6||+14. 5||Tariff Review – 5ºC|
|Energisa Sul-Sudeste||405.7||399.9||– 5.8||– 1.4||Annual Adjustment|
|Energisa Rondônia||398.9||407.7||8.8||+ 2.2||Annual Adjustment|
|Energisa Acre||210.8||218.0||7.2||+ 3.4||Annual Adjustment|
(1) DRA – Previous Reference Date: defined as the date the last rate process ratified by Aneel is effective from, be it an adjustment or rate review, which includes the costs incurred and revenue earned in the twelve months relating to the rate process.
(2) DRP – Processing Reference Date: the DRP is defined as the date the rate process under analysis to be ratified by Aneel is effective from, be it an adjustment or rate review, which includes the costs and revenue projected for the twelve months relating to the rate process.