Put: Antonio Carlos Mazzucco

The President of the Republic sanctioned, with some vetoes, Provisional Measure 1,031/2021, which enables the capitalization of Eletrobrás, a company responsible for 30% of the electricity generated in the country. The MP was converted into Law 14,182/2021, published in the Official Gazette of the Union on July 13.

Among the vetoes, 14 in total, is the article that authorized the Executive Branch to reuse employees of the company and subsidiaries, dismissed without just cause, for a period of one year after privatization. The measure, as already explained in a previous article, is unconstitutional, according to Binding Precedent 43, which provides for the unconstitutionality of any type of appointment that allows a civil servant to invest, without prior approval in a public examination for his/her appointment, in a position that is not part of the career in which he/she was previously invested. The section on the acquisition of up to 1% of the Union's shares by employees was also vetoed.

Another vetoed article concerns the extinction of four subsidiaries of Eletrobras, Chesf-PE, Furnas-RJ, Eletronorte-DF and Eletrosul-SC, which provided for the non-extinction, incorporation or merger, for a period of 10 years. For the Government, such a measure hinders the privatization and management of the company, as well as in the case of possible corporate restructuring.

Regarding the obligation to relocate the population living in the range of high-voltage transmission lines and currently occupying the right-of-way of transmission lines, this was also vetoed because, according to the Executive Branch, the law did not mention the income of the families to be prioritized or relocated, which would violate the premise of the Casa Verde e Amarela Program, which is to serve low-income families, and the legislative proposal does not define the origin of the resources needed to finance the 'relocations'. The article provided that Eletrobrás should relocate any and all population living in the right-of-way of transmission lines with voltage equal to or greater than 230 kV, in the metropolitan region of the state capitals, within a period of up to 5 years after the privatization process.

Regarding the transfer of funds not committed to projects contracted up to February 23, 2021 and those related to projects rejected or whose execution had not been proven, they would be allocated to the Energy Development Account (CDE) in favor of tariff moderation, according to the regulation of the National Electric Energy Agency (Aneel). However, such measure was vetoed, since for the Executive the measure goes against the public interest by generating legal uncertainty by affecting decisions and premises taken based on previous legislation.

Finally, the President of the Republic maintained the article that provides for the market reserve for contracting Small Hydroelectric Power Plants (PCHs), whose construction and operation depend only on authorization from Aneel (in other cases, an auction is required for the concession of the exploration of the waterfall), however, the production is not controlled by the ONS (National Operator of the Electric System), as well as the extension of the contracts of the plants built by Proinfa, the Incentive Program for Alternative Sources of Electric Energy, with the objective of increasing the participation of electric energy produced by projects of Independent Autonomous Producers, designed based on wind sources, small hydroelectric plants and biomass, in the National Interconnected Electric System.

According to the Ministry of Economy, the capitalization will take place in 2022, since the rules for the sale are the responsibility of the National Energy Policy Council and, after definition, the BNDES will facilitate the sale of shares and with the approval of the Federal Court of Auditors, there will be the publication of notices for the negotiation of shares.

For the consumer, despite the Government's forecast of benefits arising from the privatization measure, non-governmental entities consider that privatization will increase the cost of electricity.